Which of the Following Is Inconsistent with the Concept of Semistrong

question 36

Multiple Choice

Which of the following is inconsistent with the concept of semistrong efficient markets?

• A)An investor hears a financial analyst on television claim that investors can earn unusually high returns by buying stocks near the end of December and selling them in early January.
• By following this advice, the investor does earn an abnormally high return on his portfolio.
• B)An investor observes that the bonds of an airline that has filed for bankruptcy are selling for an extremely low price and decides to purchase some of the bonds. Fortunately, the
• Airline overcomes its financial difficulties, the bond payments are made as promised, and
• The investor earns an extraordinarily high return on this investment.
• C)A diner in a New York City restaurant overhears two men at the next table talking about a merger between their two firms and earns high profits by purchasing stock based on this
• Information.
• D)All of the above are inconsistent with the concept of semistrong efficient markets.