The efficient market hypothesis says that,on average,professional investors will
A)tend to earn below average rates of returns.
B)earn a normal rate of return.
C)outperform investors with inside information.
D)tend to outperform most market participants.
E)earn the same rate of return over time regardless of the risk assumed.

Question

Quizplus · Accepted Answer

The efficient market hypothesis states that it is impossible to consistently outperform the market because all publicly available information is already reflected in stock prices. Therefore, professional investors and other market participants will earn a normal rate of return, on average, that reflects the overall market performance.

The Efficient Market Hypothesis Says That,on Average,professional Investors Will