Which of the following result of event studies about market anomalies would NOT support the semi-strong form of the efficient market hypothesis? Test showing that: a. Market react rapidly to announcements of accounting changes b. stock splits do not result in short-run or long-run impacts on security return c. pricing adjustments for IPO occur within one day of the offering d. short-run profit opportunities occur around the listing date on a national exchange. Why the answer is D? i thought C could also be the answer, if it takes 1 day to adjust the price, and not instant, that means semi-strong doesnt hold, no? What do you think?

They said pricing adjustments would occur within one day … which is anywhere from seconds to 24 hours. If they said “takes a day to occur” or “occur in at least a day”, then that would be too long for semi-strong. I think D is a more appropriate answer anyway. It doesn’t make sense that you could predict when profit opportunities will occur in semi-strong, especially on a national (read: relatively high volume, good liquidity) market. That simply wouldn’t happen.

short run profit opportunities would not occur given the semi-strong EMH

it’s like fundamental analysis. it assume market adjust quickly to new public information, thus one can not gain profit solely on public information.