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:

Generate Lower Costs

The process or strategy aimed at reducing production or operational expenses to enhance profitability.

Equity Carve-Outs

A corporate strategy of creating a new, independent company through the sale or distribution of new shares of an existing part of the company to external or existing shareholders.

EMH

Efficient Market Hypothesis, the theory that all known information is reflected in stock prices and that it is impossible to consistently outperform the market through expert stock selection or market timing.

Law Of One Price

The rule stipulating that equivalent securities or bundles of securities must sell at equal prices to preclude arbitrage opportunities.