CFA Level I sample question

CFA Level I Market Efficiency question

Equity Investments / Market Efficiency

No-login practice

Market Efficiency sample question

Choose an answer before revealing the explanation, key takeaway, and answer-choice review.

Question 1 of 1Score 0/1

Very Difficult

Equity Investments

Market Efficiency

A stock's quarterly earnings exceed the consensus forecast by 20%. Its price rises 4.2% on the announcement day and then rises an additional 2.6% on a risk-adjusted basis over the following 45 trading days. A strategy of buying immediately after such positive surprises earns an average abnormal return of 1.8% per event after round-trip transaction costs of 0.8%. If this pattern persists, it most directly challenges:

Report an issue

Question of the Week

Get one CFA Level I question by email

Receive a weekly practice question with answer-choice explanations and a short takeaway.