Which of the following statements is CORRECT? A. If your uncle earned a higher r

Question

Which of the following statements is CORRECT?

A. If your uncle earned a higher return on his portfolio over a 10-year period than the return on the overall stock market, this would demonstrate that the stock market is inefficient.

B. If a market is weak-form efficient, this implies that above-average returns can best be achieved by focusing on past movement of stock prices.

C. Because of increased globalization, all of the world’s stock markets are equally efficient as that term is defined in the text.

D. If a market is semistrong-form efficient, this implies that above-average returns cannot be achieved by analyzing publicly available data because such information is already reflected in stock prices.

E. If a market is strong-form efficient, this implies that the returns on bonds and stocks should be identical.

Explanation / Answer

If a market is semi strong-form efficient, this implies that above-average returns cannot be achieved by analyzing publicly available data because such information is already reflected in stock prices

answer d

If a market is semi strong-form efficient, this implies that above-average returns cannot be achieved by analyzing publicly available data because such information is already reflected in stock prices

Semi strong implies that all public information is reflected in the stock prices and so above average returns cannot be generated by analyzing the publicly available information

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