If security markets are totally efficient,the best common stock strategy to take is:
A)an asset allocation approach.
B)the modern portfolio theory.
C)an active strategy.
D)a passive strategy.

Question

Quizplus · Accepted Answer

If security markets are totally efficient, then all available information is already reflected in stock prices, making it impossible to consistently outperform the market through active management or stock picking. Therefore, a passive strategy, such as investing in an index fund, would be the best choice as it would allow you to capture the performance of the entire market with low fees and minimal effort.

If Security Markets Are Totally Efficient,the Best Common Stock Strategy