The optimal forecast of next period's market value (price) for an asset when we know only this period's information must be the asset's

Question

Quizplus · Accepted Answer

The optimal forecast of next period's market value for an asset, given only this period's information, is the asset's current price. This is based on the efficient market hypothesis, which posits that all known information is already reflected in current prices. Therefore, the best estimate of the asset's value in the next period, without new information, is its current price.

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