The word "efficient" in the term "efficient markets hypothesis" refers to the idea that
A)fundamental analysis is an efficient way to go about choosing which stocks to buy or sell.
B)stock prices move upward and downward "efficiently," rather than following a "random walk."
C)the stock market is "informationally efficient."
D)companies employ officers and managers who are well-qualified to perform their jobs.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis suggests that the stock market is "informationally efficient," meaning that stock prices reflect all publicly available information. This implies that it is difficult to consistently outperform the market through fundamental analysis or other means.

The Word "Efficient" in the Term "Efficient Markets Hypothesis" Refers