The efficient markets hypothesis most clearly implies that extra-market returns are:
A) common in the long run.
B) rare in the long run.
C) always attained in the long run.
D) never attained in the long run.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis suggests that all available information about a security is already reflected in its market price. Therefore, it is difficult for investors to consistently earn extra-market returns in the long run, making them rare rather than common.

The Efficient Markets Hypothesis Most Clearly Implies That Extra-Market Returns