The efficient markets hypothesis says that
A)only individual investors can make money in the stock market.
B)it should be difficult to find stocks whose price differs from their fundamental value.
C)stock prices do not follow a random walk.
D)All of the above.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis states that in an efficient market it should be difficult to find stocks whose price differs from their fundamental value. The theory assumes that all relevant information is already incorporated into the stock prices, making it impossible for investors to consistently beat the market. Therefore, individual investors cannot make money in the stock market, and stock prices follow a random walk.

The Efficient Markets Hypothesis Says That