If capital markets are efficient, then ______________.
A) there is no reason to believe that prices are too high or too low
B) it is possible to profit regularly from publicly available information
C) prices will adjust slowly when reacting to new information
D) it is not possible to make money by playing the stock market
E) historical price trends will give you a good idea of where prices are headed in the future

Question

If capital markets are efficient, then ______________. 
A) there is no reason to believe that prices are too high or too low
B) it is possible to profit regularly from publicly available information
C) prices will adjust slowly when reacting to new information
D) it is not possible to make money by playing the stock market
E) historical price trends will give you a good idea of where prices are headed in the future

Quizplus · Accepted Answer

In efficient capital markets, prices fully reflect all available information, meaning there's no basis to claim prices are too high or too low.

If Capital Markets Are Efficient, Then ______________