Q866
An efficient market hypothesis states in which all public or private information is reflected in current market prices is classified as
A.
market efficiency
B.
semi strong efficiency
C.
weak form efficiency
D.
strong form efficiency
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
An efficient market hypothesis states in which all public or private information is reflected in current market prices is classified as strong form efficiency. Strong-form efficiency is a component of the random walk theory and states that market and securities prices are not random and are influenced by past events. Strong-form efficiency is the opposite of weak form efficiency.