Ann Uses Two Approaches to Trading Stocks

question 54

Multiple Choice

Ann uses two approaches to trading stocks.First,she trades on what she believes is a repetitive pattern as seen in Dotson Co's historical prices.Secondly,she analyzes the financial statements of The Allen Co.to compute changes in the return on equity as a predictor of future stock prices for that firm.She trades based on both strategies.Ann earns excess profits on her return on equity strategy but not on her historical prices strategy.This suggests that the market is at least ________ efficient but less than ________ efficient.

• A) weak-form; mild-form
• B) mild-form; semistrong-form
• C) weak-form; semistrong-form
• D) semistrong-form; full-form
• E) semistrong-form; strong-form

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Definitions:

Social Psychologists

Researchers who study how individuals think, feel, and behave in social contexts.

Insincere

Characterized by a lack of genuineness or honesty in expression; not expressing genuine feelings.

Trustworthiness

The ability to be relied on as honest or truthful.

Ingratiation

A psychological technique involving deliberate efforts to win someone's favor or to make oneself appear more likable to others.