According to the theory of efficient markets:

Question

Quizplus · Accepted Answer

The theory of efficient markets states that it is difficult for investors to consistently generate above-average returns because market prices already reflect all known information. Therefore, a money market manager who charges no commission should not, on average, outperform an individual investor with access to the same funds. Choices A and B are incorrect because the theory of efficient markets suggests that investors cannot consistently use rules of thumb or forecasting models to outperform the market. Choice D is incorrect because the theory of efficient markets suggests that stock prices will fluctuate as new information becomes available.

According to the Theory of Efficient Markets