Most evidence indicates that U.S. stock markets are ________.
A) reasonably weak-form and semistrong-form efficient
B) strong-form efficient
C) reasonably weak-form but not semistrong- or strong-form efficient
D) neither weak-, semistrong-, nor strong-form efficient

Question

Quizplus · Accepted Answer

Most studies and empirical evidence suggest that U.S. stock markets are reasonably weak-form and semistrong-form efficient. This means that past price and volume information are quickly and accurately reflected in current stock prices, and publicly available information is quickly and accurately reflected in stock prices. However, there may be some inefficiencies arising from insider trading or anomalies that arise due to liquidity shocks or behavioral biases. There is not enough evidence to suggest that U.S. stock markets are strong-form efficient, as insider information may be used by some market participants to gain an advantage. Therefore, choice A is the best answer.

Most Evidence Indicates That U