If statistical tests of stock returns over time support the efficient market hypothesis the resulting correlations should be
A) Positive.
B) Negative.
C) Zero.
D) Lagged.
E) Skewed.

Question

Quizplus · Accepted Answer

If statistical tests of stock returns support the efficient market hypothesis, it means that stock prices already reflect all available information, making it impossible to predict future returns based on past performance. As a result, there would be no correlation between past and future returns, leading to a zero correlation coefficient.

If Statistical Tests of Stock Returns Over Time Support the Efficient