Important implications of the efficient market hypothesis include which of the following?
A) Future changes in stock prices should, for all practical purposes, be unpredictable.
B) Stock prices will respond to announcements only when the information in these announcements is new.
C) Sometimes a stock price declines when good news is announced.
D) All of the above.
E) Only A and B of the above.

Question

Quizplus · Accepted Answer

The efficient market hypothesis implies that stock prices fully reflect all available information, making future price changes unpredictable (A), prices respond only to new information (B), and sometimes prices may decline on good news if the news was not as good as expected or if other factors are at play (C).

Important Implications of the Efficient Market Hypothesis Include Which of the Following