When the price of a financial asset embodies all available information bearing on its value, this...

When the price of a financial asset embodies all available information bearing on its value, this reflects

		a. The Fisher effect
		b. The term premium hypothesis
		c. The efficient markets hypothesis
		d. None of the above

Solutions

Expert Solution

Efficient market hypothesis advocates that all the publicly available information and the privately available information have already been discounted into the stock price and there is no scope for making any additional rate of return.

Hence, when the price of the financial asset embodies all available information bearing on its value this will be reflecting Efficient market hypothesis.

Correct answer will be option (C) the Efficient market hypothesis.

jeff jeffy answered 2 years ago

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