Question

According to the efficient market hypothesis, which of the following statements is not correct? Group of answer choices Stock market prices tend to rise today if they rose yesterday. As judged by the typical person in the market, all stocks are fairly valued all the time. At the market price, the number of shares being offered for sale matches the number of shares people want to buy. All of the above statements are incorrect.

Answer 1

Answer:

In this case,the correct answer is the first option or Stock market prices tend to rise today if they rose yesterday.

Explanation:

Based on the Efficient Market Hypothesis(EMH),the market price of the respective company shares is balanced and valued fairly without any predictable or unforeseen fluctuations.The hypothesis basically states that the stock or share prices are always fairly valued during their financial or commercial exchange and denote all possible information in the market.At this point the market price or value of the stocks or shares are balanced and fair and hence,any predictions about the share price fluctuations by the investors or market speculators are not applicable.Hence,the share prices are stable,fair and consistent and no one can practically sell any share or stock below or above this par market value.