Proponents of the EMH typically advocate
A) buying individual stocks on margin and trading frequently.
B) investing in hedge funds.
C) a passive investment strategy.
D) buying individual stocks on margin, trading frequently, and investing in hedge funds.
E) investing in hedge funds and a passive investment strategy.

Question

Quizplus · Accepted Answer

The Efficient Market Hypothesis (EMH) suggests that all known information is already reflected in stock prices, making it impossible to consistently achieve higher returns through active trading or stock picking. Therefore, proponents of EMH typically advocate for a passive investment strategy, such as investing in index funds, which aim to replicate the performance of a market index.

Proponents of the EMH Typically Advocate