Which of the following results may be inconsistent with semi-strong-form market efficiency?

Question

Quizplus · Accepted Answer

A result showing that share returns follow a predictable trend after a profit announcement is inconsistent with semi-strong-form market efficiency, which posits that all publicly available information, such as profit announcements, is quickly and fully reflected in a stock's price. If investors were able to consistently predict the direction of returns post-announcement, it would suggest that the market had not fully absorbed all available information. Choices B and C both support semi-strong-form efficiency: instantaneous price reactions and no abnormal returns indicate that the market has fully incorporated the new information. Therefore, option D is also incorrect.

Which of the Following Results May Be Inconsistent with Semi-Strong-Form