Equity question available, following, question, returns, should

lxwarr30

A valid test of the weak form of the EMH should incorporate which of the following ?

1. Only publicly available data
2. An estimate of all transaction costs
3. A risk adjustment of returns


A. 1 & 2
B. 2 & 3
c. 1,2 & 3

ogoluwa

The problem with all three must be incorporated is that the weak EMH is not supposed to take into account ALL public information, but only those that are market related. My answer would have been (2)

draz

I actually think I came across a similar question when doing Schweser, and got it wrong too...
Anyways, this would be the kind of question that hopefully won't be tested since it's pretty ambiguous.