Market Efficiency

Consider the following:
I. Zero information-acquisition cost leads to fully efficient markets
II. High information costs reduce incentives to exploit mispricing
III. Information asymmetry can persist due to acquisition costs

How many of the above statements are correct?

Consider the following:
I. High transaction costs reduce arbitrage activity
II. Limited information availability reduces efficiency
III. Unlimited ability to trade enhances efficiency

How many of the above are factors affecting market efficiency?

Consider the following:
I. Fundamental analysis consistently generates abnormal returns in semi-strong efficient markets
II. Technical analysis cannot consistently generate abnormal returns in weak-form efficient markets
III. Passive investing is justified under strong-form efficiency

How many of the above statements are correct?

Consider the following:
I. Market value always equals intrinsic value in an efficient market
II. Intrinsic value is an estimate based on fundamental information
III. Differences between market and intrinsic value can motivate trading

How many of the above statements are correct?

Consider the following:
I. Time-series anomalies relate to patterns over time
II. Cross-sectional anomalies relate to differences across securities
III. Anomalies imply markets are perfectly efficient

How many of the above are correct statements?

Consider the following:
I. Closed-end funds may trade below intrinsic value
II. Discounts represent a violation of strict market efficiency
III. Discounts can persist over time

How many of the above statements are correct?

Consider the following:
I. Prices reflect all past trading information only
II. Prices reflect all publicly available information
III. Prices reflect both public and private information

How many of the above correctly describe distinct forms of market efficiency?

Consider the following:
I. Short-selling restrictions can limit arbitrage
II. Transaction costs can prevent exploitation of mispricing
III. Unlimited capital ensures perfect efficiency

How many of the above statements correctly describe limits to market efficiency?

Consider the following:
I. Earnings announcements are immediately reflected in prices
II. Fundamental analysis cannot consistently generate excess returns
III. Insider information can still provide an advantage

How many of the above statements are consistent with semi-strong efficiency?

Consider the following:
I. Past price patterns cannot be used to generate abnormal returns
II. Public information can still generate abnormal returns
III. Prices fully reflect historical trading data

How many of the above statements are consistent with weak-form efficiency?

Consider the following:
I. Loss aversion may cause investors to avoid realizing losses
II. Herding can lead to price deviations from intrinsic value
III. Behavioral biases always eliminate arbitrage opportunities

How many of the above are consistent with behavioral finance explanations of inefficiency?

Consider the following:
I. Earnings surprises can lead to predictable price movements
II. Markets may not fully adjust immediately to new earnings information
III. Earnings surprises are irrelevant in all forms of efficiency

How many of the above statements are correct?

Consider the following:
I. Faster information dissemination increases efficiency
II. Costly information acquisition reduces efficiency
III. Equal access to information improves efficiency

How many of the above statements are correct?

Consider the following:
I. Even insiders cannot earn abnormal returns
II. All information, public and private, is reflected in prices
III. Active management can consistently outperform markets

How many of the above statements are consistent with strong-form efficiency?