Question

The idea that stock prices should reflect all available information and can thus not be predicted is known as _________ .

efficient markets

rigged markets

inefficient markets

none of the above

Answer 1

Option A is correct

The idea that stock prices should reflect all available information and can thus not be predicted is known as efficient markets

If the markets are efficient, then the stock prices reflect all the publicly available information and hence abnormal returns cannot be achieved through either technical analysis or fundamental analysis. So, option C is incorrect. In an inefficient market, future stock prices can be predicted.

Option B is incorrect because in rigged market illegal practices take place