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    Question

    According to the Efficient Market Hypothesis (EMH) in

    its semi-strong form, which of the following would be useless in earning abnormal returns?
    A Analysis of historical price patterns (technical analysis). Correct Answer Incorrect Answer
    B Analysis of public financial statements and news (fundamental analysis). Correct Answer Incorrect Answer
    C Insider information. Correct Answer Incorrect Answer
    D Both (a) and (b). Correct Answer Incorrect Answer
    E All of the above. Correct Answer Incorrect Answer

    Solution

    The Semi-Strong form of EMH states that all publicly available information is already reflected in stock prices. Therefore, neither technical analysis (past prices) nor fundamental analysis (public financial data) can consistently yield abnormal returns. Insider information (non-public) could still be profitable, which is addressed by the Strong form.

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