An example that specifically contradicts strong-form market efficiency in U.S. stock markets is that:
A) excess profits are observed in cases of insider trading.
B) stock prices follow predictable patterns within each month.
C) random-walk behavior is reliable.
D)fundamental analysts outperform the S&P 500.

Question

Quizplus · Accepted Answer

Excess profits observed in cases of insider trading indicate that there is information available to insiders that is not readily available to the public. This contradicts the idea that all information is immediately reflected in stock prices and thus contradicts strong-form market efficiency.

An Example That Specifically Contradicts Strong-Form Market Efficiency in U