Suppose that, after conducting an analysis of past stock prices, you come up with the following...

Question

Suppose that, after conducting an analysis of past stock prices, you come up with the following observations. Which would appear to contradict the weak form of the efficient market hypothesis? Explain.
a. The average rate of return is significantly greater than zero.
b. The correlation between the return during a given week and the return during the following week is zero.
c. One could have made superior returns by buying stock after a 10% rise in price and selling after a 10% fall.
d. One could have made higher-than-average capital gains by holding stocks with low dividend yields.

Robert · Accepted Answer

One could have made superior returns by buying stock after 10% rise in price and 
selling after a 10% fall 
Reasoning--->This is a classic filter rule which should not produce superior 
returns in an efficient market 
This is a classic filter rule,

Suppose that, after conducting an analysis of past stock prices, you come up with the following observations. Which would appear to contradict the weak form of the efficient market hypothesis?...

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