If the financial markets are highly efficient, then:
A)investing based on technical analysis is highly recommended.
B)holding a diversified, low-cost, passively managed portfolio is probably your best investment strategy.
C)you should adopt an investment strategy based on market timing.
D)having a professional manager who actively trades your portfolio is most likely your best investment strategy.
E)it does not matter which securities you invest in as all securities will provide relatively equal returns.

Question

Quizplus · Accepted Answer

If the financial markets are highly efficient, it means that prices reflect all available information and it is difficult to consistently outperform the market through active trading or stock picking. Therefore, holding a diversified, low-cost, passively managed portfolio is likely the best investment strategy as it provides broad exposure to the market and minimizes fees and transaction costs.

If the Financial Markets Are Highly Efficient, Then