The semistrong form of the efficient market hypothesis maintains all of the following, except that:
A)there is no learning lag in the distribution of public information.
B)all public information is immediately impounded into the value of a security.
C)technical analysis is helpful in determining whether a stock is overvalued or undervalued.
D)fundamental analysis cannot outperform the market.

Question

Quizplus · Accepted Answer

The semi-strong form of the efficient market hypothesis maintains that all public information is already impounded into the value of a security; and therefore, one cannot use fundamental analysis to determine whether a stock is undervalued or overvalued. If the semi-strong form is true, then fundamental analysis doesn't work.

The Semistrong Form of the Efficient Market Hypothesis Maintains All