Which of the following statements related to market efficiency tend to be supported by current evidence?
I.Markets tend to respond quickly to new information.
II.It is difficult for investors to earn abnormal returns.
III.Short-run prices are difficult to predict accurately based on public information.
IV.Markets are most likely weak form efficient.

Question

Quizplus · Accepted Answer

Current evidence supports the ideas that markets respond quickly to new information, making it difficult for investors to consistently earn abnormal returns, and that short-run prices are hard to predict accurately based on public information. These concepts align with the efficient market hypothesis, particularly its semi-strong form, which posits that all public information is already reflected in stock prices, making it challenging to achieve higher returns without taking on additional risk.

Which of the Following Statements Related to Market Efficiency Tend