The efficient markets hypothesis suggests that it is no better to invest in a mutual fund that has performed well for 5 years in a row than one that has performed poorly for 5 years in a row.

Question

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The efficient markets hypothesis states that all public information is reflected in the current stock price and therefore it is impossible to consistently outperform the market. This means that past performance, whether good or bad, is not a reliable indicator of future performance. Hence, it is true that it is no better to invest in a mutual fund that has performed well for 5 years in a row than one that has performed poorly for 5 years in a row, according to the efficient markets hypothesis.

The Efficient Markets Hypothesis Suggests That It Is No Better