You have observed that the forecasts of an investment advisor consistently outperform the other reported forecasts. The efficient markets hypothesis says that future forecasts by this advisor
A)may or may not be better than the other forecasts. Past performance is no guarantee of the future.
B)will always be the best of the group.
C)will definitely be worse in the future. What goes up must come down.
D)will be worse in the near future,but improve over time.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis states that all available information is already reflected in stock prices, and therefore it is unlikely that any one individual or advisor consistently outperforms the market in the long run. Past performance is not a guarantee of future results, and there are many factors that could impact the accuracy of future forecasts. Therefore, it is possible that the advisor's future forecasts may or may not be better than the other forecasts, but it is not a given that they will always be the best or worse in the future.

You Have Observed That the Forecasts of an Investment Advisor