According to the efficient market hypothesis, purchasing high P/E stock should not produce superior investment results.

Question

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The Efficient Market Hypothesis (EMH) suggests that all available information is already reflected in stock prices, including information about a stock's Price-to-Earnings (P/E) ratio. Therefore, purchasing high P/E stocks should not consistently produce superior investment results, as these expectations are already priced in.

According to the Efficient Market Hypothesis, Purchasing High P/E Stock