Which of the following statements is the most consistent with evidence provided on the EMH?

Question

Quizplus · Accepted Answer

The statement about event tests being joint tests of the asset-pricing model used and market efficiency is consistent with the evidence provided by the EMH. Option A is not consistent with the EMH, as it suggests that the market may not always react efficiently to good news. Option B is not consistent either, as the EMH argues that anomalies that generate risk-adjusted excess returns cannot persist in the long run. Option D is also not consistent with the EMH, as it suggests that small company stocks are underpriced, which goes against the idea that markets are efficient and prices reflect all available information.

Which of the Following Statements Is the Most Consistent with Evidence