Which of the Following Results May Be Inconsistent with Semi-Strong-Form

question 41

Multiple Choice

Which of the following results may be inconsistent with semi-strong-form market efficiency?

• A)Share returns follow a predictable trend after a profit announcement.
• B)Share prices react instantaneously to profit announcements.
• C)Abnormal returns are not detected around profit announcements.
• D)None of the given options.

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Definitions:

Memory Sin

A term referring to the various kinds of inaccuracies or errors that human memory is prone to, such as transience, absent-mindedness, misattribution, and suggestibility, among others.

Decay

In the context of science, it often refers to the process by which organic substances break down into simpler forms of matter; in physics, it can refer to the decrease in number or function of particles over time.

Commission

A fee paid to an agent or employee for facilitating a sale or service.

Hypnotism

A psychological technique involving inducing a state of intense concentration or trance-like state, aimed at heightening suggestibility and relaxation.