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

Question

Quizplus · Accepted Answer

In the hierarchy of market efficiency, weak form efficiency suggests that all past trading information is already reflected in stock prices, and thus, investors cannot earn excess returns by trading on this information. However, it does not necessarily imply that semi-strong form efficiency, which includes all publicly available information, must hold. Semi-strong form efficiency may or may not exist in a market that is weak form efficient.

If the Market Is Weak Form Eﬃcient