When market is in the semi-strong form of market efficiency:
A) investors would be able to earn abnormal returns by using publicly available information.
B) a security's price at a particular time fully reflects the information contained in its sequence of past prices.
C) investors would be able to earn abnormal returns by trading on private information.
D) a security's price at a particular time fully reflects both publicly and not publicly available information.

Question

Quizplus · Accepted Answer

In the semi-strong form of market efficiency, all publicly available information is already reflected in stock prices, so abnormal returns cannot be earned using this information. However, abnormal returns can still be earned by trading on private (insider) information.

When Market Is in the Semi-Strong Form of Market Efficiency