CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

After careful analysis, Tim discovers that he can make above-normal returns on his investments if he buys oil company stocks just before noon on any given trading day and then sells them immediately before the market closes that day. Which of the following describes this event? This is a violation of ______ market efficiency.

A. all forms of
B. semi-strong-form
C. weak-form
D. strong-form
E. This is not a violation of market efficiency.
Correct Answer: A

User Contributed Comments 8

User Comment
jamiejamie semi-strong and strong both encompass the weak form, therefore logically it must hold that all forms will be violated if this opportunity would arise, therefore it's A.
Gina isn't this a violation of semistrong-form efficiency? - intraday effect.
morpheus918 Yes, it violates all 3.
mtcfa If it violates weak form, it violates the others as well.
stevelaz It violates all 3 forms
Gooner7 Should we make the assumption that if it violates the weak form than it violates all 3? That makes sense to me intuitively; kind of like m1,m2,m3
birdperson @gooner7 -its not an assumption. it is literally the theory itself.
khalifa92 thus market is inefficient
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