In an efficient market, the expected abnormal return on a security is:
A) equal to zero.
B) equal to the risk-free return.
C) equal to the security's required return.
D) greater than the security's required return.

Question

Quizplus · Accepted Answer

In an efficient market, all available information is already reflected in the security's price, so the expected abnormal return, which is the return beyond the market's expected return, is zero.

In an Efficient Market, the Expected Abnormal Return on a Security