Your broker suggests that you can make consistent,excess profits by purchasing stocks on the 20^th of the month and selling them on the last day of the month.If this is true,then: A) the market is only semi strong-form efficient. B) the market violates even weak-form efficiency. C) insiders will be the only investors to profit. D) prices follow a random walk.

Question

Quizplus · Accepted Answer

The broker's suggestion of a consistent profit-making strategy based on a certain time period contradicts weak-form efficiency, which argues that stock prices already reflect all historical pricing information, making it impossible to profit from such a tactic. Therefore, the market must be violating weak-form efficiency.

Your Broker Suggests That You Can Make Consistent,excess Profits by Purchasing