The efficient markets hypothesis says that
A)only individual investors can make money in the stock market.
B)it should be easy to find stocks whose price differs from their fundamental value.
C)stock prices follow a random walk.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis states that stock prices follow a random walk, which means they are impossible to predict and past price movements cannot be used to predict future price movements. Therefore, choice C is correct. Choices A and B are incorrect as they contradict the efficient markets hypothesis.

The Efficient Markets Hypothesis Says That