Asked by Mercy Ikediuba on May 17, 2024
Verified
The efficient market hypothesis asserts that because of quick and efficient dissemination of information, the prices of stocks reflect all publicly available information.
Efficient Market Hypothesis
The theory that all existing information is already reflected in securities prices, thus making it impossible to consistently achieve higher returns.
Dissemination
The process of spreading information, knowledge, or ideas to a large number of people.
- Understand the efficient market hypothesis and how information dissemination affects stock prices.
Verified Answer
KS
Khizra SaleemMay 19, 2024
Final Answer :
True
Explanation :
The efficient market hypothesis states that it is impossible to consistently achieve returns in excess of average market returns, because stocks always trade at their fair value on stock exchanges. This is due to the quick and efficient dissemination of all publicly available information, which is immediately reflected in stock prices.
Learning Objectives
- Understand the efficient market hypothesis and how information dissemination affects stock prices.
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