The efficient markets hypothesis implies
A)that all stocks are fairly valued all the time and that no stock is a better buy than any other.
B)that all stocks are fairly valued all the time,but that some stocks may be better buys than other.
C)that some stocks may be better buys than others and stock experts can determine which ones.
D)that no stock is efficiently valued.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis suggests that markets are highly efficient and all stocks are fairly valued all the time, and therefore, no stock is a better buy than any other. It implies that any new information relevant to a stock will be quickly reflected in its price, making it impossible to consistently beat the market on a risk-adjusted basis.

The Efficient Markets Hypothesis Implies