If markets are efficient, which of the following investors should achieve superior returns over time?
A)Investors who choose stocks by throwing darts at a list of stocks in the financial pages of a newspaper
B)Analysts who spend considerable time evaluating the best stocks to buy
C)Mutual fund managers who manage other people's money for a living
D)None of the options are correct.

Question

Quizplus · Accepted Answer

If markets are efficient, all available information would be reflected in the current prices of securities, making it extremely difficult for any investor or analyst to consistently outperform the market over time. Therefore, chance (option A), extensive analysis (option B), or professional management (option C) would not necessarily lead to superior returns.

If Markets Are Efficient, Which of the Following Investors Should