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Which of the following statements is most likely incorrect? A . The efficient market hypothesis indicates that unless an agent has more information than another
Which of the following statements is most likely incorrect?
AThe efficient market hypothesis indicates that unless an agent has more information than another agent in the market, it is not possible to make abnormal and consisten returns. But if these returns are observed, it was due to pure luck.
BIf one single investor in the market has more information than everyone else in the market, the efficient market hypothesis is still likely to hold, provided that this investor is a rational agent.
CThe efficient market hypothesis suggests that financial markets eg the equity marketcannot be efficient if some agents receive information faster than others.
DThe semistrong version of the efficient market hypothesis is the most applicable in real work because it not only encompasses the information on the weak form but also because it includes other firmspecific information.
EIf Bachelier's proposition of random walk theory is correct for an asset, then we cannot make abnormal and consistent returns by trading this asset alone, except by pure luck.
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