Question

The efficient market hypothesis says that, on average,

professional investors will tend to earn below average rates of returns

earn the same rate of return over time regardless of the risk assumed.

tend to earn below average rates of returns.

outperform investors with inside information.

tend to outperform most market participants.

or earn a normal rate of return

Answer 1

Hello Sir/ Mam

YOUR REQUIRED ANSWER IS LAST OPTION : earn a normal rate of return

Efficient Market Hypothesis says that investor will earn a risk-adjusted normal rate of return even after applying technical and fundamental analysis as the share price already reflects all the public information. Hence, we will not be able to earn abnormal returns.

I hope this solves your doubt.

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