"Although stock prices sometimes deviate from their fair prices based on expected future cash flows, transaction costs make it impossible for investors to find unusually good bets." This
Statement would be attributed to an investor in which of the fundamentals-based classes?

Question

Quizplus · Accepted Answer

A "firm believer" in the fundamentals-based class would acknowledge that stock prices can deviate from their fair value but would argue that transaction costs and other market frictions prevent investors from consistently exploiting these deviations for profit.

"Although Stock Prices Sometimes Deviate from Their Fair Prices Based