Most Studies of Stock Market Efficiency Suggest That the Stock

question 59

Multiple Choice

Most studies of stock market efficiency suggest that the stock market is highly efficient in the weak form and reasonably efficient in the semistrong form.Based on these findings,which of the following statements is correct?

• A)Information disclosed in companies' most recent annual reports can be used to consistently beat the market.
• B)The stock price for a company has been increasing for the past 6 months. Based on this information, it must be true that the stock price will also increase during the current month.
• C)Information you read in a daily newspaper such as National Post today cannot be used to select stocks that will consistently beat the market.
• D)Managers who have inside information that is not available to the public cannot consistently earn abnormal returns, i.e., returns that are higher than those predicted by the SML.

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Definitions:

Sunlight Exposure

The act of exposing one's skin to sunlight, which can lead to the production of vitamin D, mood improvement, but also risks like sunburn or skin cancer if excessive.

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A subtype of schizophrenia characterized by prominent delusions of persecution or conspiracy.

Psychosis

A mental health disorder where a person loses touch with reality, experiencing delusions, hallucinations, or thought disorder.

Cannabis Use

The act of consuming cannabis, a psychoactive drug derived from the Cannabis plant, for recreational or medicinal purposes.