If security markets are fully efficient, the best common stock strategy is:
A) a rotation strategy.
B) a buy low, sell high strategy.
C) an active strategy.
D) a passive strategy.

Question

Quizplus · Accepted Answer

In fully efficient markets, all available information is already reflected in stock prices, making it difficult to consistently outperform the market. Therefore, a passive strategy, such as buying and holding a diversified portfolio, is considered optimal.

If Security Markets Are Fully Efficient, the Best Common Stock