Implications of efficient market hypothesis

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1. A stock market analyst is able to identify mispriced stocks by comparing the average price for the last 10 days to the average price for the last 60 days. If this is true, what do you know about the market?

2. What are the implications of the efficient market hypothesis for investors who buy and sell stocks in an attempt to "beat the market"?

3. There are several celebrated investors and stock pickers frequently mentioned in the financial press who have recorded huge returns on their investments over the past two decades. Is the success of these particular investors an invalidation of the EMH? Explain.

 

Reference no: EM1353428

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