The efficient market hypothesis holds that that financial markets price assets at their intrinsic worth, given all available information. Which of the following forms of the efficient market hypothesis defines all available information as information, including security price trends, publicly available information, and insider information?
A) Weak
B) Semi-weak
C) Semi-strong
D) Strong

Question

The efficient market hypothesis holds that that financial markets price assets at their intrinsic worth, given all available information. Which of the following forms of the efficient market hypothesis defines all available information as information, including security price trends, publicly available information, and insider information? 
A) Weak
B) Semi-weak
C) Semi-strong
D) Strong

Quizplus · Accepted Answer

The strong form of the efficient market hypothesis posits that all information, including public, private (insider information), and historical prices, is fully reflected in stock prices, meaning no one can consistently achieve higher returns.

The Efficient Market Hypothesis Holds That That Financial Markets Price