Ask Question
BusinessBusiness
25 October, 20:51

A friend of yours trades stocks based on confidential information he overhears at his work. He even told you once that this information is not available to the general public. However, he keeps complaining to you that he can never make any profit on his stock trades. Based on this, you can argue that the stock market is ___ form efficient.

+1
Answers (1)
  1. 25 October, 21:11
    0
    The correct answer is letter "B": either weak, semi-strong, or strong.

    Explanation:

    The Efficient Market Hypothesis (EMH) is a theory that states that stocks reflect all the information there is so there is no form investors can beat the market even if having insider information. The EMH establishes then, that technical or fundamental analysis is useless at the moment of "predicting" stock prices.

    There are three (3) forms of EMH: weak, semi-strong, and strong. Therefore, if a friend of ours mentions that he cannot beat the market even when having insider information, it implies the market he is trading at is either weak, semi-strong, or strong.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A friend of yours trades stocks based on confidential information he overhears at his work. He even told you once that this information is ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Suppose that the average annual return on the Standard and Poor's 500 Index from 1969 to 2005 was 14.8 percent. The average annual T-bill yield during the same period was 5.6 percent. What was the market risk premium during these 10 years?
Answers (1)
Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year.
Answers (1)
Marty, a 16-year-old, contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle. Marty agrees to make monthly payments until the purchase price plus interest are paid in full. Which of the following is correct? a.
Answers (1)
Producer surplus equals the Group of answer choices amount received by sellers minus the amount paid by buyers. value to buyers minus the cost to sellers. value to buyers minus the amount paid by buyers.
Answers (1)
In general, how long does it take to accomplish a long-term goal? A. a few days to a week B. a few weeks to a month C. a few months to a year D. more than a year Reset Next
Answers (1)
New Questions in Business
The last stage of the new-product development process is
Answers (1)
Divided Fantastic Frames sells its frames for $15 per unit. Variable costs total $6 per unit, and fixed costs total $90,000. If Fantastic Frames increases sales by
Answers (1)
A trade show is usually focused on what? a. an employer b. an industry c. a school d. a craft
Answers (1)
The Harrisburg Store has net working capital of $2,715, net fixed assets of $22,407, sales of $31,350, and current liabilities of $3,908. How many dollars' worth of sales are generated from every $1 in total assets
Answers (1)
Select all maintenance procedures that may be performed in an office. update software replace printer cartridges clean copy machines install virus-protection software print copies to be distributed at a meeting
Answers (1)
Home » Business » A friend of yours trades stocks based on confidential information he overhears at his work. He even told you once that this information is not available to the general public.
Sign Up Forgot Password?