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:

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost, reflecting changes in material prices.

Materials Quantity Variance

The gap between the actual and expected quantities of materials used in production, with each difference multiplied by the standard unit cost.

Raw Materials Purchase

The acquisition of basic materials needed for the production of goods, a critical input in the manufacturing process.

Raw Materials Inventory

The stock of basic materials that are required to manufacture goods, held by a company awaiting to be used in the production process.