Which one of the following statements best defines the efficient market hypothesis? A) Efficient markets limit competition. B) Security prices in efficient markets remain steady as new information becomes available. C) Mispriced securities are common in efficient markets. D) All securities in an efficient market are zero net present value investments. E) All securities provide the same positive rate of return when the market is efficient.

Answer :

Answer: D) All securities in an efficient market are zero net present value investments.

Explanation:

The efficient market hypothesis states that the prices of shares reflects every information available.

According to the efficient market analysis, when an economic entity is buying or selling a security like stocks etc, the securities have zero net present value investments and the fair value for the stocks will be given.

Therefore, option D is the correct answer

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