10 Questions
What is the meaning of market efficiency as per the Efficient Securities Markets EMH?
Security prices fully reflect all publicly available information about that security.
In which form of market efficiency does the price fully reflect public and private information?
Strong form
What type of investors would not gain abnormal return in an efficient securities market?
Sophisticated investors
What is the implication of market efficiency for financial reporting?
Stock price reacts to accounting information, hence full disclosure is important.
According to the Efficient Securities Markets EMH, what does investing in an efficient market resemble?
"A fair game" with no bargains.
According to the Efficient Securities Markets EMH, security prices reflect inside information
False
In a weak form of market efficiency, prices fully reflect historical information
True
Market efficiency implies that investing is a fair game with no bargains
True
In a semi-strong form of market efficiency, price fully reflects public and private information
False
Efficient securities markets lead to abnormal returns for sophisticated investors
False
Test your knowledge of the Efficient Securities Markets Hypothesis (EMH) full form and the meaning of market efficiency. Explore the different forms of market efficiency and understand the characteristics associated with it.
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