Research Suggests Company Insiders Earn Abnormal Returns on Their Stock

question 9

Multiple Choice

Research suggests company insiders earn abnormal returns on their stock transactions. What does this research mean for the efficient market hypothesis (EMH) ?

• A) Insider trading has nothing to do with the EMH.
• B) Profitable insider trading contradicts all forms of the EMH.
• C) Profitable insider trading contradicts only the weak form of the EMH.
• D) Profitable insider trading contradicts only the strong form of the EMH

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