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.

---

Definitions:

Activity-based System Accuracy

Activity-based system accuracy refers to the precision with which an activity-based costing system allocates overhead costs to products or services based on the actual activities undertaken.

Distorted Product Costs

The result of allocating overhead or other costs to products in a manner that does not accurately reflect the true resources consumed by the products.

Non-volume Factors

Elements that affect a business’s operations and cost structures that are not related to the volume of goods or services produced, such as changes in technology or regulatory environments.

Non-manufacturing Costs

Expenses not directly tied to the production process, such as selling, general, and administrative expenses.