Question

1.) The weak form of efficient market theory implies that technical analysis is valuable. TRUE OR...

1.) The weak form of efficient market theory implies that technical analysis is valuable.

TRUE OR FALSE

2.) An equivalent alternative to paying cash dividends is to pay stock dividends.

TRUE OR FALSE

3.) Managers try to avoid reducing their stock's dividend.

TRUE OR FALSE

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Answer #1

1. The given statement is FALSE because technical analysis will not be valuable in weak form of Efficient market because market will not be following the trend and there will be no momentum so all the historical trends and the past prices are reflected already into the price and there is no possibility of Technical Analysis.

2. The given statement is FALSE because cash dividend is leading to cash outflows whereas stock dividend will be leading to decrease in the overall Earning per share and it is not equivalent in nature.

3. The given statement is TRUE as manager will be trying to reduce dividend.

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