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The efficient market hypothesis suggests that ________.
A) passive portfolio management strategies are the most appropriate investment strategies
B) active portfolio management strategies are the most appropriate investment strategies
C) either active or passive strategies may be appropriate, depending on the expected direction of the market
D) a bottom-up approach is the most appropriate investment strategy

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Answer:

Letter A is correct. Passive portfolio management strategies are the most appropriate investment strategies

Explanation:

The passive management investment strategy is an efficient market indicator as it is based on stock analysis. That is, the price fluctuation of a particular stock will indicate relevant information about the current and future earnings of a stock. The passive management investment strategy supports the idea that relevant index data show that the stock market outweighs the costs of actively managed funds.