Answer:
Step-by-step explanation:
The Efficient Market Hypothesis (EMH) suggests that financial markets are efficient and that asset prices reflect all available information. According to the EMH, it is difficult for investors to consistently beat the market because all publicly available information is already incorporated into asset prices.
(a) Nearly half of all professionally managed mutual funds being able to outperform the S&P 500 in a typical year would be a violation of the EMH, as it suggests that the market is not fully efficient and that some investors are able to consistently outperform the market.
(b) Money managers that outperform the market (on a risk-adjusted basis) in one year are likely to outperform in the following year would be consistent with the weak form of EMH, which suggests that past prices and returns cannot be used to consistently outperform the market.
(c) Stock prices tending to be predictably more volatile in January than other months would be a violation of the EMH, as it suggests that there are predictable patterns or anomalies that can be exploited for profit.
(d) Stock prices of companies that announce increased earnings in January tending to outperform the market in February would be a violation of the EMH, as it suggests that some investors have access to information that is not yet reflected in stock prices.
(e) Stocks that perform well in one week performing poorly in the following week would be consistent with the EMH, as it suggests that there is no consistent pattern or anomaly that can be exploited for profit.