According to the efficient markets hypothesis,:
A) everyone can outperform the stock market indexes.
B) when one investor outperforms the stock market index, another investor must underperform.
C) ordinary investors should always follow the advice of market geniuses like Warren Buffet.
D) no investor can consistently outperform the stock market indexes.

Question

Quizplus · Accepted Answer

According to the efficient markets hypothesis, the market always incorporates all available information and therefore, no investor can consistently outperform the stock market indexes. This means that over time, any outperformance by one investor would be offset by underperformance by another. Therefore, actively trying to beat the market by picking individual stocks or timing the market is not likely to be successful in the long run.

According to the Efficient Markets Hypothesis