Discoveries of buying shares of stock at the closing price on a given day and selling them before noon on the following day, you can generate an excess return.
A) This is a violation of weak-form market efficiency
B) This is a violation of semi-weak-form market efficiency
C) This is a violation of semistrong-form market efficiency
D) This is a violation of strong-form market efficiency
E) This does not violate market efficiency.

Question

Quizplus · Accepted Answer

This violates weak-form market efficiency, which assumes that all past price and volume information is already reflected in current market prices. If there were predictable patterns in past price and volume information, they would already be priced into the current market price, making it impossible to generate excess returns by trading based on that information.

Discoveries of Buying Shares of Stock at the Closing Price