Which Statement Regarding the Efficient Markets Hypothesis Is True

question 19

Multiple Choice

Which statement regarding the efficient markets hypothesis is true?

• A)The efficient markets hypothesis suggests that the market does not price stocks fairly; hence, managers should make decisions based on the premise that firms' stocks are undervalued or overvalued.
• B)An individual who has information about past stock prices would be able to profit from this information if weak-form market efficiency exists.
• C)For the efficient markets hypothesis to hold true, every individual investor must be "rational."
• D)Semistrong-form market efficiency means that stock prices reflect all public, but not necessarily all private, information.