The following statements concerning market efficiency have been made:
Posted: Mon Mar 07, 2022 8:23 am
1. Only markets which are strong-form efficient will not be affected by creative accounting or window dressing of accounts.
2. When a market is weak-form efficient, it is possible to predict future share price movements based on past trends of share price movements.
Which of the following combinations (true/false) is correct?
A. Statement 1 = True, Statement 2 = True
B. Statement 1 = True, Statement 2 = False
C. Statement 1 = False, Statement 2 = True
D. Statement 1 = False, Statement 2 = False
2. When a market is weak-form efficient, it is possible to predict future share price movements based on past trends of share price movements.
Which of the following combinations (true/false) is correct?
A. Statement 1 = True, Statement 2 = True
B. Statement 1 = True, Statement 2 = False
C. Statement 1 = False, Statement 2 = True
D. Statement 1 = False, Statement 2 = False