Concept explainers
To discuss: “The market is weak form efficient if it is semi-strong form efficient”.
Introduction:
Semi-strong form efficient market exists if the stock prices reflect the public information in the form of financial statements. This type is controversial because it suggests that finding the best stock investment based on financial information is useless. It is because the stock price in the market already reflects the impact of financial information.
A weak form efficient market exists if the stock prices at present reflect the trend in the stock’s historical prices. This market suggests that finding the best stock investment based on historical information is useless because the stock price in the market already reflects the information.
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ESSENTIALS CORPORATE FINANCE + CNCT A.
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