Which of the Following Would Violate the Efficient Market Hypothesis

question 5

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) Investors earn abnormal returns months after a firm announces surprise earnings.
• D) High-earnings growth stocks fail to generate higher returns for investors than do low earnings growth stocks.

---

Definitions:

Reward

A beneficial factor, such as food, money, or social recognition, that reinforces a particular behavior, making it more likely to occur in the future.

Operants

Behaviors that are controlled through reinforcement or punishment in the context of operant conditioning.

Voluntary Responses

Actions that are under conscious control, such as deciding to move a limb.

Discriminative Stimuli

Stimuli in the environment that signal the availability of reinforcement or punishment, guiding behavior accordingly.