In an efficient market, it is difficult to consistently find stocks whose prices do not fairly reflect the present values of future expected cash flows.

Question

Quizplus · Accepted Answer

In an efficient market, all relevant information is already reflected in stock prices, making it difficult to consistently find undervalued or overvalued stocks. Therefore, it is more difficult to find stocks whose prices do not fairly reflect the present values of future expected cash flows.

In an Efficient Market, It Is Difficult to Consistently Find