Asked by Ashley Fondeur on Jun 12, 2024
Verified
Most evidence indicates that U.S. stock markets are ________.
A) reasonably weak-form and semistrong-form efficient
B) strong-form efficient
C) reasonably weak-form but not semistrong- or strong-form efficient
D) neither weak-, semistrong-, nor strong-form efficient
Semistrong-Form Efficient
A market hypothesis stating that share prices incorporate all publicly available information, making it impossible to consistently achieve higher returns.
Weak-Form Efficient
A market hypothesis suggesting that all past prices of stock are reflected in the current price, hence historical data cannot be used to predict future prices.
Strong-Form Efficient
A hypothesis that states all information, both public and private, is completely accounted for in stock prices, and that no investor can achieve consistently higher returns.
- Understand the concept of market efficiency in varying forms (weak, semistrong, and strong).
- Analyze how evidence indicates the efficiency level of U.S. stock markets.
Verified Answer
Learning Objectives
- Understand the concept of market efficiency in varying forms (weak, semistrong, and strong).
- Analyze how evidence indicates the efficiency level of U.S. stock markets.
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