Final Answer:
The false statement is that "Investors can consistently achieve above-average returns by exploiting market inefficiencies."
Step-by-step explanation:
In an efficient market, prices instantly and accurately reflect all available information, making it difficult for investors to consistently outperform the market by exploiting inefficiencies.
The Efficient Market Hypothesis (EMH) asserts that prices already incorporate all relevant data, leaving little room for consistently successful strategies based on historical information. Therefore, the belief that investors can regularly achieve above-average returns contradicts the principles of an efficient market.
While anomalies and short-term inefficiencies may exist, they are often challenging to exploit consistently, making it challenging for investors to consistently beat the market over the long term. The concept of market efficiency influences investment strategies and underlines the importance of information in determining asset prices.