If Markets Were Semi-Strong Form Efficient, Which of the Following

question 6

Multiple Choice

If markets were semi-strong form efficient, which of the following situations would yield abnormal returns?

• A)Analyzing a company's earnings report.
• B)Identifying a pattern in a company's stock price.
• C)Obtaining insider information.
• D)None of the above would yield abnormal returns.

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Definitions:

Compensating Variation

An economic concept representing the amount of additional income an individual would need to maintain the same level of utility after a price change.

Utility Function

A mathematical representation used in economics to model the satisfaction or benefit a consumer derives from consuming goods and services.

Prices

The amounts of money required to purchase goods and services, serving as signals in an economy to allocate resources.

Income

Payment for services or from investment returns, customarily coming in at steady intervals.