If prices in a particular market fully reflect all public and private knowledge, the market is efficient in the:
A) weak form
B) semi-strong form
C) strong form
D) both a and b

Question

Quizplus · Accepted Answer

Strong form efficiency of a market indicates that in addition to public knowledge, even private or insider knowledge is incorporated into the prices of securities. Therefore, if prices in a market fully reflect all public and private knowledge, the market is efficient in the strong form. Weak form efficiency only takes into account past prices and trends, while semi-strong form efficiency considers public information such as financial statements and news announcements.

If Prices in a Particular Market Fully Reflect All Public