Gordon has conducted a test to determine whether he could have earned abnormal returns by purchasing stocks after their price increased by 2% and selling stocks after their price fell by 2%. This is an example of:
A) a runs test.
B) a filter rule test.
C) an event study.
D) a test of strong form efficiency.

Question

Quizplus · Accepted Answer

A filter rule test involves buying and selling stocks based on specific price movements, such as a 2% increase or decrease, to test for patterns or anomalies in stock price behavior.

Gordon Has Conducted a Test to Determine Whether He Could