If the market is semistrong form efficient, then which one of the following statements is true?
A)Neither technical nor fundamental analysis leads to abnormal profits.
B)Technical analysts have the ability to earn abnormal profits but fundamental analysts cannot.
C)Fundamental analysts can earn abnormal profits but technical analysts cannot.
D)Both technical and fundamental analysts earn abnormal profits based on their research.
E)No answer can be determined as the form of market efficiency is unrelated to abnormal returns.

Question

Quizplus · Accepted Answer

Semistrong form efficiency implies that all publicly available information is already reflected in the stock prices. Therefore, neither technical nor fundamental analysis can help an investor to earn abnormal profits as all information is already incorporated in the prices.

If the Market Is Semistrong Form Efficient, Then Which One