If the markets are efficient, which of the following investors should have above normal return on assets over time?
A) Those who choose their stocks by throwing darts at a list of stocks found in the financial pages of a newspaper.
B) Analysts who spend considerable time evaluating the best stocks to buy.
C) Mutual fund managers who manage other people's money for a living.
D) None of the above

Question

Quizplus · Accepted Answer

If the markets are efficient, it means that all available information and factors affecting the price of assets are reflected in the market price, and it is impossible to consistently outperform the market without insider information or luck. Therefore, all investors should have an average return on assets over time, and no one should have an above-normal return consistently.

If the Markets Are Efficient, Which of the Following Investors