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Homework answers / question archive / If an investor can earn above average returns based on a thorough reading of the financial press, the stock market is at best a inefficient

If an investor can earn above average returns based on a thorough reading of the financial press, the stock market is at best a inefficient

Accounting

If an investor can earn above average returns based on a thorough reading of the financial press, the stock market is at best

a inefficient.

b weak form efficient.

c semistrong form efficient.

d strong form efficient.

e strong.

pur-new-sol

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a. Inefficient.

Inefficent means the stock price does not reflect or considered all information available. so by analysing the available data one can make above average return. By analysis one can find undervalued or overvalued stocks and make above average return.

The efficient theory states that one can not make above average return because the market is efficient.

In weak form of efficiency the market price reflects all past data, so by analysing the past data one can not make above average return

In semi strong form of efficiency the market price reflects all publicly available data, so by analysing the publicly available data one can not make above average return.

In strong form of efficiency the market price reflects all data public or private, so by analysing theany data one can not make above average return.

Strong means the market is again perfect, one can not make above average return.