Which of the following statements is correct?
A) A stock is said to be in equilibrium when investors at the margin think its expected rate of return is equal to its required rate of return.
B) According to the Efficient Markets Hypothesis,stock prices are best predicted by use of sophisticated statistical techniques such as regression analysis.
C) The more efficient markets are,in an EMH sense,the easier it is for sophisticated investors to profit by analyzing data that companies have released to the public.
D) The more efficient markets are,in an EMH sense,the more dangerous it would be for an investor to pick stocks at random as opposed to picking them on the basis of a careful analysis.
E) The EMH would predict that one can "beat the market" by analyzing publicly available data,if the analyst is efficient.

Question

Quizplus · Accepted Answer

According to the concept of market equilibrium, a stock is said to be in equilibrium when investors at the margin think its expected rate of return is equal to its required rate of return. This would be the point at which the supply and demand of the stock are balanced, and it is neither overvalued nor undervalued.

Which of the Following Statements Is Correct