Question

Problem 7 Part 1 | Attempt 2/4 for 8 pts. Which of the following statements are inconsistent with the efficient market hypothesis? Check all that apply: Stocks that outperform the index in March always underperform it in April. Stocks that outperform the index in March always outperform it in April. The average annual return on stocks is greater than zero. Half of fund managers are able to beat their relevant index each year, before fees. Try again Submit

Attempt: Checking all options is the wrong answer

Answer 1

The third statement is correct , and is consistent with efficient market hypothesis. The average annual return on stocks is greater than zero.

The other three statements are inconsistent, because as per efficient market hypothesis , all the information is reflected in the price , so there is no chance of under or over value and also beating the index. Therefore , these three statements are the answers.