1.) i) In 1987, trader Ivan Boesky was accused of insidertrading based on his...

80.2K

Verified Solution

Question

Accounting

1.) i) In 1987, trader Ivan Boesky was accused of insidertrading based on his massive purchases of stock of firms beforeannouncements of acquisitions of those firms. Which of thefollowing is true?
a) This indicates the market is strong-form efficient
b) This indicates the market is at best semi-strong formefficient
c) Insider trading indicates the market is weak-formefficient
d) Insider trading does not indicate anything regarding marketefficiency.
ii) If the share price automatically adjusts when there isinformation that has not been distributed to investors, which ofthe following types of market efficiency is best evidenced?
a) weak form
b) semi-strong form
c) strong form
d) semi-weak form
iii) Which of the following forms of market efficiency should beleast likely in a country which has insider trading laws?
a) strong form market efficiency
b) semi-strong form market efficiency
c) weak form market efficiency
d) semi-weak form market efficiency

Answer & Explanation Solved by verified expert

3.8 Ratings (509 Votes)

1 Correct answer is bThis indicates the market is at best semistrong form efficient Semi stron form market effeciency is one where all public available information is captured ins See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: Accounting1.) i) In 1987, trader Ivan Boesky was accused of insidertrading based on his massive...1.) i) In 1987, trader Ivan Boesky was accused of insidertrading based on his massive purchases of stock of firms beforeannouncements of acquisitions of those firms. Which of thefollowing is true?a) This indicates the market is strong-form efficientb) This indicates the market is at best semi-strong formefficientc) Insider trading indicates the market is weak-formefficientd) Insider trading does not indicate anything regarding marketefficiency.ii) If the share price automatically adjusts when there isinformation that has not been distributed to investors, which ofthe following types of market efficiency is best evidenced?a) weak formb) semi-strong formc) strong formd) semi-weak formiii) Which of the following forms of market efficiency should beleast likely in a country which has insider trading laws?a) strong form market efficiencyb) semi-strong form market efficiencyc) weak form market efficiencyd) semi-weak form market efficiency