9. In more recent years, empirical evidence indicates that the efficient market hypothesis may not always be generally applicable. Which of the following is NOT the evidence against the efficient market hypothesis? a. Stock prices may overreact to news announcements and that the pricing errors are corrected only slowly. b. The stock market appears to display excessive volatility; that is, fluctuations in stock prices may be much greater than are warranted by fluctuations in their fundamental value. c. Many studies show that small firms have earned abnormally high returns over long periods of time. d. Many studies confirm that stock prices are unpredictable and follow a random walk.

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.