An implication of the efficient market hypothesis is
A) securities prices are random determined
B) stock prices reflect historical information
C) few investors can expect to outperform the market over a period of time
D) after adjusting for risk, money market securities offer superior returns

Question

Quizplus · Accepted Answer

The efficient market hypothesis suggests that all available information is already reflected in the current stock price, and therefore it is difficult for investors to consistently outperform the market by using public information alone. This implies that few investors can expect to consistently beat the market over time. Options A and B are not necessarily implications of the efficient market hypothesis, and option D is not accurate since money market securities typically offer lower returns than other investment options.

An Implication of the Efficient Market Hypothesis Is