Which of the Following Is a Correct Statement of the Efficient

Multiple Choice

Which of the following is a correct statement of the efficient markets theory of stock price movements?

A) unpredictable fluctuations in share prices can occur only as the result of irrational behavior by investors
B) volatility in share prices imply a perfectly functioning stock market
C) if the stock market is efficient, stock prices will display an unpredictable, random path
D) predicting changes in investor expectations permits forecasts of future share prices despite random drift
E) economic fundamentals (interest rates and corporate profits) determine the fluctuations in stock prices around a trend created by psychological factors