Answer: the market incorporates all historical and current information.

An efficient market is one where asset prices fully reflect all available historical and current information. This means that prices adjust immediately to new information, leaving no opportunity for investors to earn consistent, superior, risk-adjusted returns. Option B is incorrect because prices in an efficient market should only react to the unanticipated or 'surprise' elements of information releases. Option C is incorrect because achieving consistent, superior, risk-adjusted returns is not possible in an efficient market, as all relevant information is already priced in.

Author: LeetQuiz Editorial Team