Question

In order to test the semistrong form of the efficient-market hypothesis, researchers have mostly relied on the:

Multiple choice question.
a. measurement of how rapidly security prices adjust to different news items
b. none of the options
c. estimation of the correlation coefficients for securities and markets
d. measurement of the performance of technical trading strategies over the years

Answer 1

a. measurement of how rapidly security prices adjust to different news items.

Step-by-step explanation:

The semi-strong form of the efficient-market hypothesis states that all publicly available information is quickly and accurately reflected in security prices. Therefore, one way to test this hypothesis is to measure how rapidly security prices adjust to different news items. If security prices adjust rapidly and efficiently to new information, it provides evidence in support of the semi-strong form of the efficient-market hypothesis.