Which of the Following Contradicts the Proposition That the Stock

question 17

Multiple Choice

Which of the following contradicts the proposition that the stock market is weakly efficient?

• A) Over 25% of mutual funds outperform the market on average.
• B) Insiders earn abnormal trading profits.
• C) Every January, the stock market earns above-normal returns.
• D) Applications of technical trading rules fail to earn abnormal returns.

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Definitions:

Economic Benefits

The gains derived from actions or decisions, typically measured in terms of revenue or income generated or costs saved.

Service Potential

The capacity or capability of an asset, especially a non-financial asset, to provide services or benefits over its useful life.

Capitalization of Interest

The process of adding accumulated interest to the principal balance of a loan, which then earns further interest.

Construction

The process or art of building structures, such as buildings, bridges, or roads.