According to the efficient markets hypothesis
A)any change in Fed policy will affect security prices and returns.
B)nothing the Fed does is capable of affecting security prices and returns.
C)the announcement of an unexpected change in Fed policy will affect security prices and returns.
D)securities prices are determined largely by Fed actions.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis suggests that all available information is already reflected in securities prices. Therefore, only new, unexpected information—such as an unexpected change in Federal Reserve policy—will affect security prices and returns, as investors react to this new information.

According to the Efficient Markets Hypothesis