Asked by Leyla Jackson on May 07, 2024
Verified
Which of the following statements is (are) correct?
A) If a market is weak-form efficient, it is also semistrong- and strong-form efficient.
B) If a market is semistrong-form efficient, it is also strong-form efficient.
C) If a market is strong-form efficient, it is also semistrong- but not weak-form efficient.
D) If a market is strong-form efficient, it is also semistrong- and weak-form efficient.
Strong-form Efficient
A theory suggesting that all information, public and private, is fully reflected in stock prices, and that it is impossible to consistently achieve higher returns.
Semistrong-form Efficient
Refers to a market efficiency form where prices include all publicly available information, including both historical and newly released financial data.
Weak-form Efficient
A level of market efficiency that assumes all past trading information is already reflected in stock prices, thus negating the ability to gain higher returns through analysis of historical prices.
- Comprehend the principle and consequences of the Efficient Market Hypothesis (EMH), encompassing its variations and critiques.
Verified Answer
Learning Objectives
- Comprehend the principle and consequences of the Efficient Market Hypothesis (EMH), encompassing its variations and critiques.
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