If the stock market is semi-strong efficient,which of the following statements is correct?
A) All stocks should have the same expected returns;however,they may have different realized returns.
B) In equilibrium,stocks and bonds should have the same expected returns.
C) Investors can outperform the market if they have access to information which has not yet been publicly revealed.
D) If the stock market has been performing strongly over the past several months,stock prices are more likely to decline than increase over the next several months.
E) None of the above statements is correct.

Question

Quizplus · Accepted Answer

If the stock market is semi-strong efficient, it means that all publicly available information is already reflected in the current stock prices. Hence, investors cannot outperform the market by using this information. Therefore, option C is correct, as it suggests that investors can outperform the market if they have access to information which has not yet been publicly revealed. Options A, B, and D are incorrect as they are not consistent with the concept of semi-strong efficiency.

If the Stock Market Is Semi-Strong Efficient,which of the Following