If in an efficient market all prices are correct and reflect market fundamentals,which of the following is a FALSE statement?
A)A stock that has done poorly in the past is more likely to do well in the future.
B)One investment is as good as any other because the securities' prices are correct.
C)A security's price reflects all available information about the intrinsic value of the security.
D)Security prices can be used by managers to assess their cost of capital accurately.

Question

Quizplus · Accepted Answer

In an efficient market, past performance of a stock is not a reliable indicator of future performance as all available information and market fundamentals are already reflected in the current price.

If in an Efficient Market All Prices Are Correct and Reflect