Final answer:
The correct answer is c) Efficient. If the stock market is efficient, analyzing published data on stocks to find bargains is unfruitful, since the stock prices already reflect all publicly available information. This is in line with the Efficient Market Hypothesis which suggests that stocks are fairly priced and that it is difficult for investors to consistently outperform the market.
Step-by-step explanation:
If the stock market is efficient, it's a waste of time for most people to seek bargains by analyzing published data on stocks. Stock prices will already reflect all publicly available information and these stocks will be fairly priced. The correct answer is c) Efficient.
The concept of an efficient stock market, often referred to as the Efficient Market Hypothesis (EMH), implies that all known information about investment securities, such as stocks, is already factored into the prices of these securities. Therefore, no amount of analysis can give an investor an edge over other investors or the market itself. Stocks will be fairly priced based on the available information, and only new, unpredictable information will change those prices. This new information is typically random and unforeseeable, leading to the idea that stock movements resemble a random walk with a trend.
Given that stock prices change in response to new and unpredictable news, most individual investors and even professional analysts face tremendous difficulty in selecting stocks that will outperform the market consistently. The track record for mutual funds, which often employ teams of analysts, also tends to be mixed, with many failing to surpass market averages over time.