Asked by
Pernika Gupta
on Dec 09, 2024
Verified
You are an investor who studies the price movements of stock to identify patterns that are repetitive. By doing this, you have been able to earn higher returns than normal. This would be a violation of:
A) The risk-return tradeoff.
B) The normal risk premium reward.
C) Strong form efficiency.
D) Semi-strong form efficiency.
E) Weak form efficiency.
Weak Form Efficiency
Refers to a theory in financial economics that suggests all past market prices and data are fully reflected in current stock prices, implying that past price movements cannot predict future stock prices accurately.
Higher Returns
The potential for gaining more profit or income from an investment compared to other options.
- Acquire a comprehension of the fundamental of market efficiency and its distinct forms: weak, semi-strong, and strong.
- Understand the implications of efficient market hypothesis for investment returns and market predictions.
Verified Answer
NS
Learning Objectives
- Acquire a comprehension of the fundamental of market efficiency and its distinct forms: weak, semi-strong, and strong.
- Understand the implications of efficient market hypothesis for investment returns and market predictions.