Question

which group of investors is capable of earning consistent, superior profits if financial markets are strong-form efficient? question 7 options: only fundamental analysts will be able to profit only technical analysts will be able to profit only inside traders will be able to profit no one will be capable of sustained, superior profits

Answer 1

None of the groups of investors can earn consistent, superior profits in strong-form efficient financial markets, as all information is already accounted for in stock prices, precluding any investor advantage.

Step-by-step explanation:

In financial markets that are strong-form efficient, all information, including private insider information, is already reflected in stock prices. Therefore, no group of investors, including fundamental analysts, technical analysts, or even inside traders, would be capable of earning consistent, superior profits. In strong-form efficient markets, no one possesses an advantage that could lead to sustained, superior profits. This concept suggests that it is improbable for financial investors to outguess the market and pick stocks guarantying high capital gains simply on the basis of past performance. Financial wealth accumulation tends to be more effective with a long-term plan involving savings and education rather than via short-term stock market maneuvers.