FREE Trial

The efficient market hypothesis implies that abnormal returns are expected to be zero. Yet in order for

Question:

The efficient market hypothesis implies that abnormal returns are expected to be zero. Yet in order for markets to be efficient, arbitrageurs must be able to force prices back into equilibrium. If they earn profits in doing so, is this fact inconsistent with market efficiency?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 72% (11 reviews)

There is nothing in the efficient markets hypothesis which says that arbitrageurs cannot ...View the full answer


answer-question-section
Answered By
tutor-profile-image
Robert Mwendwa Nzinga
I am a professional accountant with diverse skills in different fields. I am a great academic writer and article writer. I also possess skills in website development and app development. I have over the years amassed skills in project writing, business planning, human resource administration and tutoring in all business related courses.
4.90+ 187+ Reviews 378+ Question Solved
Related Book For  book-img-for-question
Financial Theory and Corporate Policy

Financial Theory and Corporate Policy

ISBN: 978-0321127211

4th edition

Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri

See More Books
Question Posted:
See More Questions

Students also viewed these Corporate Finance questions

A View Across The Rooftops An Epic Heart Wrenching And Gripping World War Two Historical Novel - ISBN: 1838880348 - Free Book