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MCQ

This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.

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May 5, 2018 at 9:28 pm #450248
humai
Participant
- Topics: 757
- Replies: 248
The existence of projects with +ve ENPV contradicts the idea that the stock market is strong form efficient
Sir the above statement is false but can you please explain me why?
The existence of information content in dividends contradicts the idea that the stock market is strong form efficient
Sir the above statement is true but can you please explain me why?
May 6, 2018 at 9:29 am #450290
John Moffat
Keymaster
- Topics: 57
- Replies: 54806
First one: just because a project has a +’vs NPB doesn’t mean the company intends to invest in it. There may be better projects and they may not have enough finance.
Second one: Investors would already have the information if it were strong-form efficient.
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