If a market is strong form efficient, it also implies that:
A)semistrong form efficiency holds.
B)weak form efficiency holds.
C)one cannot earn abnormal returns with inside information.
D)Both A and C.
E)A, B and C.

Question

Quizplus · Accepted Answer

In a strong form efficient market, all information (public and private) is reflected in stock prices. This implies that semistrong and weak form efficiencies also hold, as they are subsets of strong form efficiency. Additionally, it means that even with inside information, one cannot earn abnormal returns.

If a Market Is Strong Form Efficient, It Also Implies