Suppose That Research Shows That by Buying Stocks Issued by Companies

question 32

Multiple Choice

Suppose that research shows that by buying stocks issued by companies whose names begin with the letter G investors can earn above-normal returns in even-numbered years. From the perspective of the efficient markets hypothesis,

• A)this is further evidence that the hypothesis is correct.
• B)this would be considered a pricing anomaly.
• C)investors must have insider information on these companies.
• D)purchasers of these stocks must have been noise traders.

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Definitions:

Unconscious Forces

The underlying, hidden influences originating from the unconscious mind that affect thoughts, feelings, and behaviors.

Self-Objectification

The process by which individuals view themselves primarily as objects judged based on appearance, rather than based on abilities or personality.

Functionally Autonomous Motives

Refers to the idea that certain behaviors or motives can become independent from their original causes and continue to be pursued for their own sake.

Personality

The combination of character, behavioral, temperamental, emotional, and mental traits that define an individual's distinctive patterns of thinking, feeling, and acting.