The optimal forecast of next period's market value (price) of an asset, given this period's set of information is the asset's current price according to the efficient market's hypothesis.

Question

Quizplus · Accepted Answer

According to the Efficient Market Hypothesis (EMH), all available information is already reflected in the current price of an asset, making it the best predictor of its future price.

The Optimal Forecast of Next Period's Market Value (Price) of an Asset