The efficient market hypothesis supports which one of these statements?
A)Market prices do not reflect the underlying value of securities.
B)Managers can profitably speculate in foreign currency.
C)Financial managers can time stock and bond sales.
D)Managers cannot boost stock prices through creative accounting.
E)Market prices are uncaused.

Question

Quizplus · Accepted Answer

The efficient market hypothesis states that all public information is reflected in market prices, therefore managers cannot manipulate stock prices through accounting tricks.

The Efficient Market Hypothesis Supports Which One of These Statements