Positive abnormal return

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Reference no: EM133119921

Evaluate the following statement:

"Your friend constructs a trading strategy that, on each day, buys the 10% of firms listed on the NYSE that had the highest trading volume on the previous trading day, and short sells the 10% of firms listed on the NYSE that had the lowest trading volume on the previous trading day. If this type of strategy produces a positive abnormal return over a long period of time, then it serves as evidence in support of the Efficient Markets Hypothesis (EMH)"

Group of answer choices

True - This type of investment strategy is unrelated to all forms of the EMH

True - Profitable investment strategies are easy to find in efficient markets

True - Predicting returns based on past volumes is consistent with the weak form of EMH

False - This type of investment strategy is unrelated to all forms of the EMH

False - Predicting returns based on past price and volume data violates the weak form of the EMH

Reference no: EM133119921

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