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.

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Definitions:

Ian Craib

A British sociologist who contributed to theories on identity, psychoanalysis, and the critique of contemporary sociology.

Historically Underestimated

Referring to entities or groups that have not received due recognition or value in historical assessments.

Structures

Refers to the complex framework or arrangement of interrelated parts that make up a system or organization.

Constraints

Limitations or restrictions that affect an individual's choices or the performance of a system.