Believers in efficient markets tend to explain away market anomalies as
I. random occurrences that create an illusion of causality.
II. errors resulting from inaccurate measures of risk.
III. the result of illegal price manipulation by corporate insiders.
IV. the effect of normal human emotions such as fear and greed.
A) I and II only
B) I, II and III only
C) I and III only
D) I, II, III and IV

Question

Quizplus · Accepted Answer

Efficient market hypothesis proponents argue that anomalies appear due to random events or misjudgments about risk, rather than illegal activities or purely emotional reactions, which are explanations more aligned with behavioral finance.

Believers in Efficient Markets Tend to Explain Away Market Anomalies