The efficient markets hypothesis is the idea that:
A) asset prices represent all publicly available information.
B) stock values revert to their historical mean values.
C) the prices of assets are systemically biased, allowing savvy investors to make above-market returns by exploiting the efficiency losses.
D) stock buyers are more likely to assess financial information more efficiently than the sellers of stocks.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis suggests that asset prices reflect all publicly available information, meaning it is difficult to consistently outperform the overall market by exploiting inefficiencies. This hypothesis suggests that stock prices react quickly and accurately to new information, making it difficult for investors to consistently beat the market by buying and selling individual securities.

The Efficient Markets Hypothesis Is the Idea That