CFA Practice Question

CFA Practice Question

Which of the following statements is MOST justifiable based on empirical evidence?
A. In general, weak form market efficiency is supported.
B. Anomalies such as book-to-market ratio and small-firm excess returns are evidence against weak form efficiency.
C. No violations of semi-strong form efficiency have been documented.
Explanation: Anomalies and other evidence sometimes question the semi-strong and strong form of market efficiency. Statistical and trading rule tests, in general, support weak form efficiency.

User Contributed Comments 5

User Comment
jayjunk Not really... there are statistical and trading rules that lead to profits, like example momentum and other predictabilities.
dimanyc From my CFA book: "The results (of simulations of specific trading rules) generally support the weak-form EMH, but the results are not unanimous".
Dinosaur why can't it be B?
deibertm Because that has to do with the semi-strong. It is unrelated to the weak form
harrybay Forms of efficiency are not following an ordinal scale. A semi-strong efficient efficient market doesn't necessarily imply weak form efficiency, in theory.
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