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Suppose your friend has come up with a trading strategy that buys companies that are headquartered in New England and sells those headquartered in Texas.

Suppose your friend has come up with a trading strategy that buys companies that are

headquartered in New England and sells those headquartered in Texas. The strategy earns 5%

alpha annually (t-statistic of 3.98) when you run CAPM regressions. Which types of market

efficiency (if any) does this violate?

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