Which of the following statements is false? a. If the financial markets are effi

Question

Which of the following statements is false? a. If the financial markets are efficient, then an unexpected negative announcement about a firm s earnings will cause the price of that firm s stock to instantly adjust with minor corrections being made in the following week so that the news is accurately reflected in the price. b. If the financial markets are strong form efficient, then no one person has an advantage in the marketplace. c. Weak form market efficiency states that the value of a security is based on historical information only. d. The Efficient Market Hypothesis implies that all investments in an efficient market have a net present value of zero.

Explanation / Answer

option A is true

according to Efficient Market Hypothesis theory, a financial market will reflects all the information whether it is past or present or publicly available information. but markets reacts to every kind of information.

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