Which of the following is frequently used to test the semistrong form of the EMH?
A)statistical tests of stock-price change independence.
B)tests of specific trading rules that use past price data.
C)event studies.
D)insider returns.

Question

Quizplus · Accepted Answer

Event studies are frequently used to test the semistrong form of the EMH. These studies assess the reaction of stock prices to various types of publicly available information, such as earnings announcements or mergers and acquisitions. Statistical tests of stock-price change independence are more commonly used to test the weak form of the EMH, while tests of specific trading rules that use past price data are typically used to test the strong form of the EMH. Insider returns are not used to test any version of the EMH, as these returns involve insider trading, which is illegal.

Which of the Following Is Frequently Used to Test the Semistrong