The efficient markets hypothesis suggests that if an unexploited profit opportunity arises in an efficient market,
A) it will tend to go unnoticed for some time.
B) it will be quickly eliminated.
C) financial analysts are your best source of this information.
D) prices will reflect the unexploited profit opportunity.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis states that in efficient markets, all available information is already reflected in prices. Therefore, if an unexploited profit opportunity arises, it will be quickly identified and exploited by market participants, causing prices to adjust accordingly and eliminating the opportunity for profit.

The Efficient Markets Hypothesis Suggests That If an Unexploited Profit