If an individual with inside information can make higher than expected profits, the market is no more than semi-strong form efficient.

Question

Quizplus · Accepted Answer

In semi-strong form efficiency, all publicly available information, including news and financial reports, is reflected in the stock prices. However, inside information is not considered to be publicly available and therefore, if an individual with inside information can make higher than expected profits, it implies that the market is not fully incorporating all the available information, making it no more than semi-strong form efficient.

If an Individual with Inside Information Can Make Higher Than