An investor purchased a board lot of a leading diamond mining company with an expected return of 20 per cent per year. The following day the company's president announced a major new discovery in the Northwest Territories. The stock price immediately doubled. This scenario probably best illustrates that the:
A) weak-form EMH does not hold.
B) semi-strong-form EMH does not hold.
C) stock prices are random and that the random walk theory holds.
D) the investor was lucky.
Correct Answer:
Verified
Q17: Empirical research on semi-strong form tests of
Q18: Tests of the speed of adjustment in
Q19: Which of the following is the most
Q20: With regard to market efficiency, identify the
Q21: According to the semi-strong form of the
Q23: According to behavioural finance proponents:
A) Stock markets
Q24: The "overreaction hypothesis" as formulated by DeBondt
Q25: Evidence concerning the "overreaction hypothesis" indicates that:
A)
Q26: In a perfectly efficient market, investors are
Q27: Under the semi-strong form of the EMH,
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents