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Suppose that the managers in the following article yield only unsuccessful investment results. Which of the following statements is true? A B The market is inefficient The market is weak-form efficient The market is semistrong-form efficient The market is strong-form efficient C D Hint: Chapter 11 THE JOURNAL OF FINANCE VOL. LX, NO. 4. AUGUST 2005 Market Timing and Managerial Portfolio Decisions DIRK JENTER* ABSTRACT This paper provides evidence that top managers have contrarian views on firm value. Managers' perceptions of fundamental value diverge systematically from market val- uations, and perceived mispricing seems an important determinant of managers' de- cision making. Insider trading patterns shows that low valuation firms are regarded as undervalued by their own managers relative to high valuation firms. This finding is robust to controlling for noninformation motivated trading. Further evidence links managers' private portfolio decisions to changes in corporate capital structures, sug- gesting that managers try to actively time the market both in their private trades and in firm-level decisions