If the U.S. capital markets are not informationally efficient, ________.
A) the markets cannot be allocationally efficient
B) systematic risk does not matter
C) no type of analysis can be used to generate abnormal returns
D) returns must follow a random walk

Question

Quizplus · Accepted Answer

If the U.S. capital markets are not informationally efficient, it means that not all available information is reflected in stock prices. This inefficiency can lead to misallocation of resources, hence the markets cannot be allocationally efficient.

If the US Capital Markets Are Not Informationally Efficient, ________