An efficient stock market means that:
A) it is difficult to outperform the market, since stock prices convey all relevant public information about a company.
B) traders with inside information cannot even outperform market averages.
C) new information is slowly reflected in stock prices.
D) All of the answers are correct.

Question

Quizplus · Accepted Answer

An efficient stock market is one where stock prices reflect all relevant public information about a company, making it difficult for investors to outperform the market. Traders with inside information would also find it difficult to outperform market averages in an efficient market, and new information would be quickly reflected in stock prices. Therefore, option A is the best choice as it encompasses all these characteristics of an efficient market.

An Efficient Stock Market Means That