If capital markets are semi-strong form efficient, then: A) individuals can identify mispriced stocks using publicly...
If capital markets are semi-strong form efficient, then:
A)
individuals can identify mispriced stocks using publicly available information.
B)
studying past prices will help predict the future performance of a security.
C)
traders can earn exceptional profits using publicly available information.
D)
stock analysts have a trading advantage because of their access to vast amounts of public information.
E)
company insiders can profit based on the inside information.
Homework Answers
Answer: Opton E - company insiders can profit based on the inside information
Explanation:
In a capital markets are semi-strong efficient, neither technical analysis, which is based on past pattern of return, nor fundamental analysis, which incorporates current information, can help predict future price movements. However, non-public information can be used to earn above average return. So, insiders can based on the insider information
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