Investing in stocks purchased by insiders may generate superior investment results,which is inconsistent with the strong form of the efficient market hypothesis.

Question

Quizplus · Accepted Answer

The statement suggests that purchasing stocks based on insider information can lead to superior investment returns, which contradicts the strong form of the efficient market hypothesis. This hypothesis states that all available information is already reflected in stock prices, making it impossible to achieve superior returns by analyzing insider trading activity.

Investing in Stocks Purchased by Insiders May Generate Superior Investment