Question

Which one of the following best describes ​"semidash​strong" market​ efficiency? A. All public information is quickly reflected in security prices. B. The market is generally​ efficient, but some anomalies remain unexplained. C. Transactions are faster and lessdashexpensive than in the​ past, but not as fast or inexpensive as they could be. D. All information about a​ company, both private and​ public, is quickly reflected in its stock price.

Answer 1

The correct answer is letter "A": All public information is quickly reflected in security prices.

Step-by-step explanation:

The Efficient Market Hypothesis (EMH) states that stock prices reflect all necessary and available information making it impossible for investors to beat the market even if obtaining information from insiders. Besides, the EMH establishes that the use of technical or fundamental analysis is useless at the moment of "predicting" future stock prices.

There are three forms of EMH: weak EMH, semi-strong EMH, and strong EMH. The semi-strong form of the EMH establishes that public information adjusts rapidly to current stock prices. It also states that only material non-public information could be helpful at the moment of estimating future stock prices.