If the Market Is Semistrong Form Efficient, Then Which One

question 55

Multiple Choice

If the market is semistrong form efficient, then which one of the following statements is true?

• A)Neither technical nor fundamental analysis leads to abnormal profits.
• B)Technical analysts have the ability to earn abnormal profits but fundamental analysts cannot.
• C)Fundamental analysts can earn abnormal profits but technical analysts cannot.
• D)Both technical and fundamental analysts earn abnormal profits based on their research.
• E)No answer can be determined as the form of market efficiency is unrelated to abnormal returns.

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Definitions:

Seasonal Working Capital

Additional working capital needed to support fluctuations in business activity due to seasonal changes in demand.

Short-Term Loans

Loans that are scheduled to be repaid in less than a year, often used for working capital or emergency financing needs.

Dividend Payments

Distributions of a portion of a company's earnings, decided by the board, to a class of its shareholders.

Trade Credit

A financing arrangement where a buyer is allowed to purchase goods or services and pay the supplier at a later agreed date.