Market efficiency
A)or the lack thereof,is highly controversial.
B)has been proven to exist only during times when earnings surprises are minimal.
C)has been proven to be strong form efficient for all publicly traded markets.
D)advocates that market prices are correct with both perfect foresight and hindsight.
E)as a hypothesis has been disproven in its entirety.

Question

Quizplus · Accepted Answer

The controversy surrounding market efficiency is a well-established fact in the academic and financial communities. There are proponents who argue that markets are efficient, while others argue the opposite.

Answer: None of the options
 Choice B is incorrect because market efficiency does not depend on the level of earnings surprises. Choice C is also incorrect because there is no conclusive evidence that all publicly traded markets are strong form efficient. Choice D is incorrect because no one can have both perfect foresight and hindsight. Choice E is also incorrect because, while some aspects of market efficiency have been challenged, the hypothesis has not been entirely disproven.

Market Efficiency