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Which of the following statements concerning market efficiency is correct? I. An efficient market accurately aggregates...

Which of the following statements concerning market efficiency is correct? I. An efficient market accurately aggregates information. II. In an efficient market, portfolio managers add value by conducting detailed financial analyses of firm fundamentals. III. In an efficient market, the only way to earn higher returns is to take on more risk. IV. In the most extreme version of the efficients market hypothesis, only insiders can earn excess returns.

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Expert Solution

Ans I. An efficient market accurately aggregates information, III. In an efficient market, the only way to earn higher returns is to take on more risk.

Both point I and III are correct.

Points II, IV are incorrect.

jeff jeffy answered 2 years ago
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