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The CFO of a certain company always wears his green suit on a day that the...

The CFO of a certain company always wears his green suit on a day that the firm is about to release positive information about his company. You believe that you can profit from this information by buying the firm’s shares at the beginning of every day that the CFO shows up wearing this green suit. Describe which form of market efficiency is consistent with your belief.

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Answer #1

I believe that the CFO's to wear a green suit indicates a positive information will be declared & the company's Share price will rise. If I am correct about the CFOs garment prior to any announcement is valuable private information which will enable me to earn super profits by share trading. Therefore, my belief is consistent with the semistrong form of market efficiency .

The SSFE does not use historical prices, trading volume, rates of return, earnings, dividend payments, profitability ratios, stock splits or any other element of fundamental analysis. It considers the newly available information to shareholders to earn the returns.

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