The statement regarding the Efficient Market Hypothesis in the question is false. The Efficient Market Hypothesis (EMH) suggests that all available information is already reflected in stock prices, making it difficult to consistently outperform the market through stock picking or market timing based on new information.
Here's why the statement is false:
1. EMH states that stock prices adjust instantly to new information, not within a week or so. This means that as soon as new information becomes available, it is reflected in the stock prices without delay.
2. The hypothesis implies that it is challenging to gain an advantage by exploiting new information since stock prices quickly adjust to reflect it, making it hard to achieve abnormal returns based on such information.
In summary, the Efficient Market Hypothesis implies that the stock market adjusts rapidly to new information, contradicting the notion that it takes a week or so for changes to be reflected in stock prices.
