Efficient market hypothesis contradicts what theory?
A)Technical Analysis
B)Fundamental Analysis
C)Economic Theory
D)Modern Economics
E)Free market theory

Question

Quizplus · Accepted Answer

The Efficient Market Hypothesis (EMH) posits that all known information is already reflected in stock prices, making it impossible to consistently achieve higher returns than the overall market through either technical analysis or insider information. Technical analysis, which attempts to predict future stock prices based on historical price and volume data, directly contradicts the EMH because it operates under the assumption that one can find patterns in past trading data to predict future price movements, which EMH claims is not possible due to market efficiency.

Efficient Market Hypothesis Contradicts What Theory