The efficient market hypothesis
A) is based on the assumption that prices of securities fully reflect all available information.
B) holds that the expected return on a security equals the equilibrium return.
C) both A and B.
D) neither A nor B.

Question

Quizplus · Accepted Answer

The efficient market hypothesis is based on the assumption that prices of securities fully reflect all available information, and that the expected return on a security equals the equilibrium return. Therefore, both options A and B are correct.

The Efficient Market Hypothesis