Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. find below several statements about financial mark

Find below several statements about financial markets. Classify them with respect to market-efficiency. Choose the...

70.2K

Verified Solution

Question

Finance

Find below several statements about financial markets. Classify them with respect to market-efficiency. Choose the strongest form of efficiency prevailing from the set of the following four options:

Markets are inefficient

Weak efficiency

Semi-strong efficiency

Strong efficiency

Provide a brief rationale for your decision.

a) New information about a stock is instantaneously incorporated in the stock price.

b) A friend working in a computer company gives you the confidential information that they will release a new innovative product soon. You make a trading strategy based on this and gain a lot of money.

c) By analyzing historic data you find out that there are high returns after Swedish public holidays. You construct a successful trading strategy that exploits this relationship.

d) A professional wall-street trader identifies stocks by a sophisticated trading strategy. An ape randomly points at stocks in the Financial Times and invests in those assets. The ape outperforms the banker in terms of risk-adjusted excess returns

Answer & Explanation Solved by verified expert
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

Other questions asked by students