Tests regarding stock splits or dividends are usually tests of the __________ form of market efficiency.
A) Weak
B) Semi-strong
C) Strong
D) Semi-efficient
E) none of the above.

Question

Quizplus · Accepted Answer

Tests regarding stock splits or dividends usually involve publicly available information, which falls under the semi-strong form of market efficiency. The weak form of market efficiency does not assume that publicly available information is already incorporated into stock prices, while the strong form assumes that not only publicly available but also private information is already reflected in stock prices. Therefore, semi-strong efficiency is the appropriate form of market efficiency for tests involving events like stock splits or dividends.

Tests Regarding Stock Splits or Dividends Are Usually Tests of the __________