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One important implication of the efficient markets hypothesis is that most investors A. can benefit by...

One important implication of the efficient markets hypothesis is that most investors

A. can benefit by reacting immediately to newly disclosed earnings information.

B. can benefit by purchasing high-beta stock

C. should trade actively to help ensure the highest overall gain in their portfolios.

D. should avoid active trading.

E.should hold IPO stock issues for the long term.

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Answer #1

One important implication of the efficient markets hypothesis is that most investors

D. should avoid active trading.

An efficient market would benefit passive index investors.

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