The true value of a security is:
A) the value of that security at some future date.
B) the sum of all future dividends.
C) the amount that a fundamental analyst will pay.
D) the price that incorporates all currently available information.

Question

Quizplus · Accepted Answer

The true value of a security is determined by the price that incorporates all currently available information. This means that the market price of a security reflects all known information about the issuer, the economy, and the industry in which the issuer operates. The efficient market hypothesis states that asset prices always incorporate all publicly available information, making it difficult or impossible to consistently achieve above-average returns through analysis or prediction. Therefore, the best choice is D.

The True Value of a Security Is