Which of the following would be a viable way to earn abnormally high trading profits if...

Which of the following would be a viable way to earn abnormally high trading profits if markets are semistrong-form efficient?

Buy shares in companies with low P/E ratios.
Buy shares in companies with recent above-average price changes.
Buy shares in companies with recent below-average price changes.
Buy shares in companies for which you have advance knowledge of an improvement in the management team.

Expert Solution

Option d is correct option, Buy shares in companies for which you have advance knowledge of an improvement in the management team.
This is because in semi strong efficient market publicly traded information cannot provide abnormal profits in the the market. Advance knowledge or non public information can be used to earn profits in semi strong efficient market.

jeff jeffy answered 2 years ago

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