Question

2. Suppose Momentum can generate alpha in a model. It is against which form of market...

2. Suppose Momentum can generate alpha in a model. It is against which form of market efficiency? (

A. Strong Form

B. Semi-strong Form

C. Weak Form

D. All three forms

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Any hedge fund, investment trust or investment manager of whichever type should be unable to generate excess return over and above the risk-adjusted return for a particular investment. This statement is in line with the strong form of market efficiency which states that all information flow is absolutely unrestricted and uninfluenced by past happenings. Hence, it is not possible to determine trends and thereby make attempts at "beating" the market.

Therefore, generation of alpha is against the strong form of market efficiency.

Hence, the correct option is (a).

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2. Suppose Momentum can generate alpha in a model. It is against which form of market...
2. Suppose Momentum can generate alpha in a model. It is against which form of market efficiency? A. Strong Form B. Semi-strong Form C. Weak Form D. All three forms
2. Suppose Momentum can generate alpha in a model. It is against which form of market...
2. Suppose Momentum can generate alpha in a model. It is against which form of market efficiency?   A. Strong Form B. Semi-strong Form C. Weak Form D. All three forms
14. Which type of market efficiency is an "event study" designed to test? Group of answer...
14. Which type of market efficiency is an "event study" designed to test? Group of answer choices a. Weak form efficiency. b. Semi-strong form efficiency. c. Strong form efficiency. d. All of the above
According to which form(s) of the Efficient Markets Hypothesis will the price of Stock B immediately...
According to which form(s) of the Efficient Markets Hypothesis will the price of Stock B immediately adjust by the correct amount (there is no under- or overreaction), when a brand new piece of information about Stock B becomes public? Choose the best answer below. Select one: The weak form The semi-strong form The strong form The weak and semi-strong forms The weak and strong forms The semi-strong and strong forms The weak, semi-strong, and strong forms
15. Weak form, semi-strong form, and strong form all refer to what general area of market...
15. Weak form, semi-strong form, and strong form all refer to what general area of market efficiency? Group of answer choices a. Allocative b. Informational c. Operational d. Technical 16. The following statements are basic tenets of ___________: "Prices are determined by patterns and trends; and prices are determined by both fundamental and psychological factors" Group of answer choices a. Technical analysis b. Fundamental analysis c. Rational investing d. Sector rotation 17. What is meant by the term "mutual fund...
Which of the following types of market efficiency states that only historical prices are reflected in...
Which of the following types of market efficiency states that only historical prices are reflected in stock prices? Select one: a. Weak-form efficiency b. Semi-strong efficiency c. Strong-form effciency
You discover you can make above normal returns if you buy oil-company stocks just before noon...
You discover you can make above normal returns if you buy oil-company stocks just before noon on any given trading day and then sell them immediately before the market closes that same day. Which of the following describes this event? Multiple Choice This would not be a violation of market efficiency. This would be a violation of semi-strong form efficiency. This would be a violation of strong form efficiency. This would be a violation of all forms of market efficiency....
Which of the following statements is correct? A. If a market is weak-form efficient, it is...
Which of the following statements is correct? A. If a market is weak-form efficient, it is also semistrong- and strong-form efficient. B. If a market is semistrong-form efficient, it is also strong-form efficient. C. If a market is strong-form efficient, it is also semistrong- but not weak-form efficient. D. If a market is strong-form efficient, it is also semistrong- and weak-form efficient.
Which of the following statements is most correct? If a market is strong-form efficient this implies...
Which of the following statements is most correct? If a market is strong-form efficient this implies that the returns on bonds and stocks should be identical. If a market is weak-form efficient this implies that all public information is rapidly incorporated into market prices. If a market is semi-strong weak-form efficient this implies that all private information is rapidly incorporated into market prices. None of the above statements is correct.
Which of the following is true about the market? -If you can beat the market with...
Which of the following is true about the market? -If you can beat the market with fundamental analysis then the market is strong form efficient   -If the market is strong form efficient then the market is also semi-strong form efficient -If you can beat the market using technical analysis then the market is semi-strong form efficient -If the market is weak form efficient then the market is also semi-strong form efficient Which of the following is true if the market...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT