The theory of rational expectations,when applied to financial markets,is known as
A)monetarism.
B)the efficient markets hypothesis.
C)the theory of strict liability.
D)the theory of impossibility.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis is the application of rational expectations to financial markets. It assumes that investors have rational expectations and that all available information is reflected in the current price of assets.

The Theory of Rational Expectations,when Applied to Financial Markets,is Known