Between the years 1993 to 1998, U.S. Senators' stock portfolio outperformed the market by an average of 12% a year. Does this overturn the efficient markets hypothesis?

Question

Quizplus · Accepted Answer

The fact that U.S. Senators' stock portfolio outperformed the market by an average of 12% a year does not necessarily overturn the efficient markets hypothesis because Senators may be trading using nonpublic information, which is not embodied in the price. This is illegal, but it is a plausible explanation for their success.

Between the Years 1993 to 1998, U