If the stock market is semistrong-form efficient, which ofthe following statements would be CORRECT?

(Points: 4)

The required returns on all stocks are thesame, and the required returns on stocks are higher than therequired returns on bonds.

The required returns on stocks equal therequired returns on bonds.

A trading strategy in which you buy stocksthat have recently fallen in price is likely to provide you with areturn that exceeds the return on the overall stockmarket.

If you have insider information about aparticular stock, you cannot expect to earn an above average returnon this information because it is already incorporated into thecurrent stock price.

Even if a market is semistrong-form efficient,an investor could still earn a better return than the market returnif he or she had inside information.

Answer rating: 100% (QA)

A The required returns on all stocks are thesame and the required returns on stocks are higher than ... View the full answer