Final answer:
According to the Efficient Markets Hypothesis, stock markets reflect all available information and stocks are considered to be fairly valued, suggesting that hiring a financial adviser to find undervalued stocks is not consistent with the hypothesis. While markets may be efficient in the context of EMH, they do not necessarily ensure fairness or equal access to goods due to differences in income distribution.
Step-by-step explanation:
The Efficient Markets Hypothesis (EMH) suggests that stock prices reflect all available information, meaning that no investor can consistently achieve higher returns than the market average by using this information. Under this hypothesis, stocks are always traded at their fair value, making it impossible for investors or financial advisors to purchase undervalued stocks or sell stocks for inflated prices consistently.
Based on the EMH, the first two statements are consistent with the hypothesis. Firstly, stock markets reflect all available information about the value of stocks, and secondly, an average person in the market will believe that all stocks are fairly valued. As for the third statement, it contradicts the EMH as it suggests that it is worth hiring a financial adviser to find cheap stocks to purchase, which assumes that the market prices can be incorrect, something that EMH argues is not consistently possible due to market efficiency.
Markets may achieve a certain level of efficiency, yet they do not guarantee fairness or that everyone can achieve or access what they need, as market prices reflect the distribution of income within a society. This becomes particularly relevant when considering the ability to pay for essential goods like housing, where income disparities can lead to significant disparities in access to such goods.