honeycfa

Which of the following statements concerning market efficiency is least accurate?

A) If weak-form market efficiency holds, technical analysis cannot be used to earn abnormal returns over the long-run.

B) Tests of the semi-strong form of the EMH require that security returns be risk-adjusted using a market model.

C) Market efficiency assumes that individual market participants correctly estimate asset prices.

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Market efficiency does not assume that individual market participants correctly estimate asset prices, but does assume that their estimates are unbiased. That is, some agents will over-estimate and some will under-estimate, but they will be correct, on average.