The efficient markets hypothesis indicates that investors
A)can use the advice of technical analysts to outperform the market.
B)do better on average if they adopt a "buy and hold" strategy.
C)let too many unexploited profit opportunities go by if they adopt a "buy and hold" strategy.
D)do better if they purchase loaded mutual funds.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis suggests that it is difficult to outperform the market consistently because prices fully reflect all relevant information. Therefore, a "buy and hold" strategy tends to be the most effective approach for investors over the long-term. Technical analysts' advice may not be consistently profitable, and trying to capitalize on every opportunity can lead to excessive trading costs and lower returns. Loaded mutual funds also tend to have higher fees and expenses, which can eat into investor returns.

The Efficient Markets Hypothesis Indicates That Investors