The efficient market hypothesis suggests that:
A)while individuals can be irrational, collectively they will not.
B)because individuals are rational, collectively they are also rational.
C)irrationality must a part of every economic model.
D)asset price bubbles are efficient.

Question

Quizplus · Accepted Answer

The efficient market hypothesis posits that while individuals may act irrationally, the collective actions of all market participants lead to efficient markets where prices reflect all available information.

The Efficient Market Hypothesis Suggests That