Question

At a cocktail party, your co-worker tells you that he has beaten the market for each of the last 3 years. Suppose you believe him. Does this shake your belief in efficient markets?

Answer 1

No.

Step-by-step explanation:

Remember that several assets trade in markets; the high risk and low risk all together.

For example, an individual trades a higher risk asset once each year for the last three years should have higher returns.

However chances are high that someone who trades another asset may not be able to beat the market (earn an investment return above the performance standards). In conclusion it is usually possible but not in all cases.