Lois selects securities to invest in after carefully examining the fundamentals of a company, using the accounting statements in its annual reports. Peter seeks to earn abnormal returns solely by studying stock price charts and investing based on the patterns he finds in the past prices. Which one of the following statements is correct?
Lois selects securities to invest in after carefully examining the fundamentals of a company,
using the accounting statements in its annual reports. Peter seeks to earn abnormal returns
solely by studying stock price charts and investing based on the patterns he finds in the past
prices. Which one of the following statements is correct?
a. If Lois earns abnormal returns this violates weak-form market efficiency. If Peter earns
abnormal returns this violates strong-form market efficiency.
b. If Lois earns abnormal returns this violates strong-form market efficiency. If Peter earns
abnormal returns this violates weak-form market efficiency.
c. If Lois earns abnormal returns this violates semi-strong form market efficiency. If Peter
earns abnormal returns this violates strong-form market efficiency.
d. If Lois earns abnormal returns this violates semi-strong form market efficiency. If Peter
earns abnormal returns this violates weak-form market efficiency.
e. If Peter and Lois both earn abnormal returns this means that markets are strong-form
efficient.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
