45. A country's financial markets are weak-form efficient. This implies that it is impossible to obtain consistent, abnormal returns in the country's markets using: A. technical analysis. B. insider information. C. fundamental analysis.
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Weak-form efficiency means that past market data (like prices and trading volume) cannot be used to consistently predict future returns and generate abnormal profits. Show more…
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Which of the following is NOT correct with respect to the Efficient Market Hypothesis? If markets are semi-strong form efficient, then fundamental analysts would not be able to earn abnormally good returns, after considering the risk they assume. Semi-strong form efficiency says that if a company announces a labor strike, the stock price very quickly adjusts downward. Evidence suggests that markets are NOT strong form efficient, since insiders could make abnormally good returns trading on private information. However, that is illegal. Semi-strong form efficiency says that when Stryker makes an earnings announcement, the stock price quickly reflects the new information. Weak form efficiency says that technical analysts who study charts of stock prices and volumes can regularly make abnormally good returns, after considering the risk they assume.
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