The Efficient Markets Hypothesis (EMH)

question 26

Multiple Choice

The efficient markets hypothesis (EMH) :

• A)acknowledges that some fairly sizeable inefficiencies will exist even in efficient markets,but only over the long-term
• B)argues that markets which fluctuate noticeably from one day to the next cannot be efficient
• C)suggests that an efficient market incorporates only about 90 per cent of all public information into the market prices
• D)advocates that all investments in an efficient market have a net present value of zero
• E)argues that market prices rarely reflect the true value of a security