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Do Homework $-$ Homework $6$

ant$/$PlayerHomework$.$ aspa?homeworkid$=6923881578$questionid$=18$flushedstrueBcldaB$1$B$9715$Ecenterwin$=$yes

SECTION $1$

Charles Fairley

$03/21/255$:$21$ PM

HW Score: $55\mathrm{.}56\%,5$ of $9$

work $6$

Question $6,$ P$9\mathrm{.}2($similar to$)$

points

Points: $0$ of $1$

Which of the following facts, if true, would violate the weak form of the efficient markets hypothesis?

a$.$ Stocks earn higher returns than bonds over time.

b$.$ You can earn better$-$than$-$average returns by purchasing a stock any time it reaches a $52-$weok high.

c$.$ You can earn higher retums by investing in tech stocks than by investing in stocks of food companies.

$($Select the best answer below.$)$

A$.$ For both b and c $,$ the higher returns could be the result of greater riak, which would not violate efficient makets. In a$,$ the investor is using data on price trends to eam superior returns, and that would violate the weak form of market etficiency.

B$.$ For both a and c $,$ the higher returns could be the resut of greater risk, which would violate efficiect markets. In b $,$ the investor is using data on price trends tojarn superior retums, and that would not violate the wesk form of market efficiency.

C$.$ For both a and $c,$ the higher returns could be the result of greater risk, which would not violate efficient markets. In b$,$ the investor is using data on price trends to eam superior retums, and that would violate the weak form of market efficiency.

D$.$ For both a and b$,$ the higher returns could be the result of greater fisk, which would not violate eflicient matets. In c $,$ the investor is using data on price trends to eam superior returns, and that would violate the weak form of market efficiency.