contestada

Sabrina's father is the limo driver to the President and CEO of RSG, an investment bank in New York. Sabrina buys RSG stock whenever her father overhears information indicating increased profits at RSG, and sells RSG stock whenever her father overhears information indicating decreased profits at RSG. If she can generate consistent abnormal returns in this manner then this is a failure of:_________.
A. weak form efficiency
B. semi-strong form efficiency
C. strong form efficiency
D. all of the above
E. none of the above

Respuesta :

tutorAnne

Answer: Strong form Efficiency-c

Explanation:

Strong form of market efficiency is the strongest form of efficient market hypothesis, by Burton G. Malkiel, states that  future market price movement cannot be predicted by   technical analysis, fundamental analysis or  inside information instead it  efficiently deals with all information on a given security and reflects it in the price immediately. He added by saying the best way to maximize returns is by following a buy-and-hold strategy.

Sabrina and her father always get consistent abnormal result because even though her father gets inside information indicating when there is increase and decrease in  profits concerning stock at RSG, it will not influence the stock prices at RSG.

Otras preguntas