Long-term buy and hold strategy

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Explain why each of the following statements is either True or False.

A. If every investor followed a long-term “buy and hold” strategy, the stock market would not be efficient.

B. Stock A is trading at the top of its 52-week range, Stock B is trading at the bottom if its 52 week range. If the market is efficient, most rational investors would prefer Stock A to Stock B at their current prices.

C. Stock A is trading at the top of its 52-week range, Stock B is trading at the bottom of its 52 week range. If the market is efficient, one possible explanation for this information is that the operating performance of Company A during the past year exceeded investor expectations, while the operating performance of Company B disappointed investors.

Reference no: EM132016968

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