Question
If financial markets are semi-strong form efficient, all investors can effectivley select stocks for their portfolio by throwing darts at the Wall Street Journal stock
If financial markets are semi-strong form efficient, all investors can effectivley select stocks for their portfolio by throwing darts at the Wall Street Journal stock page. Any stock selected by dart throwing will be just as good an investment as stocks in a professionally-developed portfolio.
a. This is false because if you pick stocks via darts, investors may not up with a desirable risk-return combination.
b. This is false because professionals can guarantee higher portfolio performance given the same level of risk.
c. This is false because the markets are primarily dominated by institutional investors with deep pockets.
d. This is true because in a semi-strong form efficient stock market, all portfolios should earn the market rate of return.
e. This is true because semi-strong form efficiency means that all stocks are correctly priced -- given publicly available information.
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