You have observed that every time Toronto Skaters' Corp.stock falls by 2% in one week, it rises by 8% the next week.What is this observation consistent with?
A)Semi-strong form market efficiency
B)Semi-strong form market inefficiency
C)Weak form market efficiency
D)Weak form market inefficiency

Question

Quizplus · Accepted Answer

This observation is consistent with weak form market inefficiency because it suggests that past stock prices (in this case, a 2% fall one week followed by an 8% rise the next) can be used to predict future prices, which contradicts the principle of weak form efficiency that asserts past price information is fully reflected in current stock prices and cannot be used to achieve superior gains.

You Have Observed That Every Time Toronto Skaters' Corp