A University Professor Is Researching the Impact of Non-Public Information

question 9

Multiple Choice

A university professor is researching the impact of non-public information on the marketplace.She finds that investors who do have access to material, non-public information are consistently earning above-average risk-adjusted returns, and that the market price of the targeted securities are partially reflecting the new information.This is a violation of:
I.Strong form market efficiency
II.Semi-strong market efficiency
III.Weak form market efficiency

• A)I only
• B)I and II
• C)I and III
• D)II and III

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Definitions:

Confidence Interval Estimate

A range of values derived from sample data that is likely to contain the value of an unknown population parameter, expressed at a given level of confidence.

Prediction Interval

An estimate of an interval in which future observations will fall, with a certain level of confidence, based on current sample data.

Expected Value

The average outcome or mean of a random variable, calculated as the sum of all possible values each multiplied by its probability of occurrence.

Confidence Interval

A gamut of statistical values, extrapolated from sample data, predicted to likely retain the value of an undisclosed population parameter.