If financial markets are efficient, this implies that investors can ignore the various investment instruments available.

Question

Quizplus · Accepted Answer

If financial markets were efficient, it would not mean that investors could ignore the various investment instruments available. Rather, it would suggest that all available information about the investment instruments is already reflected in their prices, making it difficult to consistently outperform the market through individual security selection. Therefore, investors would still need to consider the various investment instruments available and strategically allocate their portfolio accordingly.

If Financial Markets Are Efficient, This Implies That Investors Can