Final answer:
Proponents of the EMH advocate for the Efficient Market Hypothesis, which contends that all available information about securities is reflected in their market prices, making the markets efficient in determining fair prices. Market equilibrium occurs at the point where supply equals demand, and the market naturally finds this balance through negotiations between buyers and sellers.
Step-by-step explanation:
Proponents of the EMH typically advocate for the Efficient Market Hypothesis, which is the first option from the list provided in the question. The Efficient Market Hypothesis asserts that financial markets are efficient in reflecting information about securities in the prices of those securities. This implies that at any given time, the prices on the stock market reflect all available information, meaning that securities are generally fairly priced and that it's difficult to consistently achieve higher-than-average returns by exploiting information.
The market equilibrium is a concept where the quantity of goods supplied is equal to the quantity of goods demanded. This balancing point is where the market price solidifies, meaning no excess supply or demand.
Markets find their equilibrium through the interaction of supply and demand. Producers and consumers negotiate prices, which leads to adjustments in supply and demand, eventually reaching a stable equilibrium price where the amount of goods producers are willing to supply equals the amount consumers are willing to buy.