The Efficient Markets Hypothesis states
A)markets tend to evolve to low transactions costs and speedy execution of orders.
B)current asset prices (e.g.,exchange rates)fully reflect all the available and relevant information.
C)current exchange rates cannot be explained by such fundamental forces as money supplies,inflation rates and so forth.
D)none of the options

Question

Quizplus · Accepted Answer

The Efficient Markets Hypothesis (EMH) states that current asset prices fully reflect all the available and relevant information, implying that it is impossible to consistently achieve returns in excess of average market returns. Therefore, choice B is the best answer as it describes the core concept of the EMH. Choices A and C are incorrect as they do not directly relate to the EMH, while choice D is incorrect as there is a correct answer to the question.

The Efficient Markets Hypothesis States