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Basic Question 17 of 20

One reason for expecting a price increase is that companies typically raise their dividends when they split their stock. The dividend change has an information effect that the company will have a new, higher level of earnings in the future. A stock split may signal a good investment in the stock. This anomaly would contradict the ______ form of the efficient market hypothesis.

A. weak
B. semi-strong
C. strong

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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt

Learning Outcome Statements

describe market anomalies

CFA® 2025 Level I Curriculum, Volume 3, Module 3.