Which of the Following Would Violate the Efficient Market Hypothesis

question 17

Multiple Choice

Which of the following would violate the efficient market hypothesis?

• A) Intel has consistently generated large profits for years.
• B) Prices for stocks before stock splits show on average consistently positive abnormal returns.
• C) Earning abnormal returns after a firm announces surprise earnings.
• D) High earnings growth stocks fail to generate higher returns for investors than low earnings growth stocks.

---

Definitions:

Special Causes

refer to uncommon, non-random sources of variation in a process, distinguishing them from normal or common causes of variation.

Process Capability Index

A statistical measure of a process's ability to produce output within given specification limits, used in process improvement strategies.

Process Capability Index

A statistical measure of process capability, indicating how well a process can meet specified performance standards.

Design Specifications

Detailed descriptions of materials, dimensions, and processes used in the construction of a product.