The efficient Market hypothesis Apredicts that it should be

The efficient Market hypothesis

A)predicts that it should be difficult to find stocks whose price differs from their fundamental value

B)assumes that investors use fundamental analysis

C)assumes that investors are rational

D) all of these are correct

Solution

(D): All the statements are correct.

Efficient market hypothesis (EMH) states that, in a market where investors rationally analyze the information regarding a stock price, the stock\'s price embeds all the current and pas historical public information available to investors. Therefore, it\'s very difficult for any stock whose price is different from the price analyzed by the investors.