If the financial markets are highly efficient,then:
A) investing based on technical analysis is highly recommended.
B) holding a diversified, low-cost, passively-managed portfolio is probably your best investment strategy.
C) you should adopt an investment strategy based on market timing.
D) having a professional manager who actively trades your portfolio is most likely your best investment strategy.
E) it doesn't matter which securities you invest in as all securities will provide relatively equal returns.

Question

Quizplus · Accepted Answer

If the financial markets are highly efficient, it means that all available information is already reflected in the prices of securities, making it difficult to consistently outperform the market through active management or market-timing strategies. Therefore, holding a diversified, low-cost, passively-managed portfolio is probably the best investment strategy, as it is based on the idea of capturing broad market returns without trying to beat the market. This approach limits expenses and reduces the risk of underperformance compared to actively managed funds.

If the Financial Markets Are Highly Efficient,then