Your Broker Suggests That You Can Make Consistent,excess Profits by Purchasing

question 31

Multiple Choice

Your broker suggests that you can make consistent,excess profits by purchasing stocks on the 20^th of the month and selling them on the last day of the month.If this is true,then:

• A) the market is only semi strong-form efficient.
• B) the market violates even weak-form efficiency.
• C) insiders will be the only investors to profit.
• D) prices follow a random walk.

---

Definitions:

Constant Costs

Costs that remain unchanged regardless of the level of production or activity.

Long-Run Equilibrium

A state in which all firms in a market are making zero economic profit, with no firm having an incentive to enter or exit the industry.

Allocative Efficiency

An economic state where resources are allocated in a way that maximizes the overall utility to society, ensuring that the goods and services produced match consumer preferences.

Minimization

The process or strategy of reducing or keeping to a minimum the size, amount, or degree of something, especially costs or liabilities.