What would an investor who follows contrarian rule do

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Question -

a) A researcher wants to test whether a market for a cybercurrency is efficient in the weak form and ran the following random walk model regression: Rt = β0 + β1Rt-1. The result of the regression estimate is β0 = 0.58 with a t-value of 2.576 and β1 = 0.0354 with a t-value of 1.102. The critical t-value at 5% level is 1.96. Does this result support the weak form market efficiency? Explain.

b) Credit balances in brokerage accounts are at an all-time high.

i) What would an investor who follows contrarian rule do? Why?

ii) What would an investor who follows the "follow the smart investors" rule do? Why?

Reference no: EM132877718

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