If the market is weak form efficient:
A)semistrong form efficiency may hold.
B)markets are not weak form efficient.
C)semistrong form efficiency must hold.
D)strong form efficiency must hold.
E)None of the above.

Question

Quizplus · Accepted Answer

If the market is weak form efficient, it means that all publicly available information is already reflected in current prices. However, this does not necessarily mean that all non-public information is also reflected in prices. Therefore, semistrong form efficiency may still hold, which means that all publicly available and non-public information is reflected in prices. Option B is incorrect because it contradicts the premise. Option C is not necessarily true as semistrong form efficiency may or may not hold. Option D is also not necessarily true as weak form efficiency does not imply strong form efficiency.

If the Market Is Weak Form Efficient