In an efficient market,the expected abnormal return on a security is:
A)equal to zero.
B)equal to the risk-free rate of return.
C)equal to the security's required return.
D)greater than the security's required return.

Question

Quizplus · Accepted Answer

In an efficient market, all publicly available information is already reflected in the security's price, making it impossible to consistently earn abnormal returns. Therefore, the expected abnormal return on a security is zero, which is also known as its alpha.

In an Efficient Market,the Expected Abnormal Return on a Security