provide evide OO About 50% of pension funds outperforms t All investors have learned to exploit signals Trend analysis is worthless in determining t Low P/E stocks tend to have positive abnor
provide evide OO About 50% of pension funds outperforms t All investors have learned to exploit signals Trend analysis is worthless in determining t Low P/E stocks tend to have positive abnor
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:7. Which of the following would provide evidence against the semi-strong form of the efficient market theory?
About 50% of pension funds outperforms the market in any year.
All investors have learned to exploit signals about future performance.
Trend analysis is worthless in determining stock prices.
Low P/E stocks tend to have positive abnormal returns over the long run.
Expert Solution
Step 1: Define=semi strong form of efficient market theory
The semi-strong form of efficient market theory is based on ana assumption that the prices of securities vary or adjust as quickly as the new public information releases. As per the semi-strong form of the efficient market hypothesis, superior gains cannot be attained by performing fundamental or technical analysis.
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