Each of the following would tend to weaken the semi-strong form Efficient Market Hypothesis except
A)There is publicly available information that Boeing Aircraft has procured a contract to build 25 planes for the US Government and the price of Boeing quickly goes up.
B)ACG, Inc.performed well for the past six months, but they just lost a major distribution contract, but the price of ACG shares continues to go up.
C)Woolworth announces higher sales turnover this quarter, and the share price remains stable.
D)Muguet Company consistently underperforms the market in October, but outperforms the market in May.

Question

Quizplus · Accepted Answer

The semi-strong form of the Efficient Market Hypothesis posits that all publicly available information is already reflected in stock prices. Therefore, if the price of Boeing quickly goes up after the announcement of a government contract, it supports the hypothesis by showing that the market efficiently incorporates new public information into stock prices. Choices B, C, and D suggest market inefficiencies, as they describe scenarios where stock prices do not seem to reflect available information or patterns predictably, which would weaken the semi-strong form hypothesis.

Each of the Following Would Tend to Weaken the Semi-Strong