Suppose you hear an investor say "I just don't have time to research the companies of the stock I buy, so I trust that the market has taken everything into account in setting current prices and just buy a well-diversified portfolio." You would understand that person to believe in

Question

Quizplus · Accepted Answer

The investor believes in efficient markets, which suggest that all available information about a stock is already reflected in its current market price. Therefore, buying a well-diversified portfolio is enough to capture the average returns of the overall market.

Suppose You Hear an Investor Say "I Just Don't Have