What does the semi-strong form of market efficiency include?
Understand the Problem
The question is asking about the components of the semi-strong form of market efficiency, which relates to how information is reflected in stock prices. The asked options provide different types of information that might influence market prices.
Answer
Prices reflect all publicly available information, undermining the effectiveness of fundamental and technical analysis.
The semi-strong form of market efficiency includes all publicly available information, suggesting that neither fundamental nor technical analysis can predict stock price movements effectively.
Answer for screen readers
The semi-strong form of market efficiency includes all publicly available information, suggesting that neither fundamental nor technical analysis can predict stock price movements effectively.
More Information
The semi-strong form is one of three forms of the Efficient Market Hypothesis (EMH), the others being the strong form and the weak form. It posits that all publicly available information is already reflected in stock prices, making it difficult for investors to gain an advantage through analysis of that data.
Tips
A common mistake is to assume that private or insider information is also incorporated in the semi-strong form. Remember, it only includes public information.
Sources
- The web page with info on - Example Source - investopedia.com
- What Is Semi-Strong Form Efficiency? (With Examples) - Indeed - ca.indeed.com
- The Weak, Strong, and Semi-Strong Efficient Market Hypotheses - investopedia.com
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