Market efficiency implies that one could earn above-average returns by examining the history of a firm's stock price.

Question

Quizplus · Accepted Answer

Market efficiency suggests that all publicly available information is already incorporated into the stock price, making it extremely difficult to earn above-average returns by simply examining historical stock prices. Investors would need to have access to insider information or make accurate predictions about future events that are not currently reflected in the stock price to earn higher returns.

Market Efficiency Implies That One Could Earn Above-Average Returns by Examining