If markets were semi-strong form efficient, which of the following situations would yield abnormal returns?
A)Analyzing a company's earnings report.
B)Identifying a pattern in a company's stock price.
C)Obtaining insider information.
D)None of the above would yield abnormal returns.

Question

Quizplus · Accepted Answer

In a semi-strong form efficient market, all publicly available information is already reflected in the stock prices. Therefore, analyzing earnings report or identifying a pattern in the stock price would not yield abnormal returns. However, obtaining insider information, which is not publicly available, would give an investor an unfair advantage and potentially yield abnormal returns. It is important to note that insider trading is illegal.

If Markets Were Semi-Strong Form Efficient, Which of the Following