Answered
Assuming that markets are semistrong efficient,which of the following statements is correct?
A) All stocks should have the same expected return.
B) Past stock prices can be successfully used to forecast future stock returns.
C) Investors' most likely returns are those predicted by the SML, but one should not expect to do any better unless he or she has either good luck or access to information that is not publicly available.
D) Investors should expect to earn more than the returns that are predicted by the SML, because if they do not, they should not invest in the stock market.
On May 17, 2024