1. Tim observed that company XYZ’s share price reacts gradually to the public release of its annual report. With respect to efficient markets, which of the following most likely indicates the market where company XYZ trades?
A. The market is weak-form efficient.
B. The market is strong-form efficient.
C. The market is waiting for new information to be released.
2. Which of the following is least likely to explain the January effect anomaly?
A. Tax selling.
B. Most companies perform poorly in January.
C. Window dressing of portfolio holdings.
3. In an inefficient market, investors will most likely benefit from a(n):
A. passive investment strategy.
B. active investment strategy.
C. active or passive investment strategy
Tomorrow’s topic is R48: Overview of Equity Securities.