Question

Which of the following statements is (are) correct?A. If a market is weak-form efficient, it is also semistrong- and strong-form efficient.B. If a market is semistrong-form efficient, it is also strong-form efficient.C. If a market is strong-form efficient, it is also semistrong- but not weak-form efficient.D. If a market is strong-form efficient, it is also semistrong- and weak-form efficient.

Answer 1

The correct answer is letter "B": If a market is semi-strong-form efficient, it is also strong-form efficient.

Step-by-step explanation:

Taken out of the Efficient Market Hypothesis or EMH, a semi-strong market is efficient if the price movement of a given security is reflected based on the information that was publicly available. In that sense, the theory dismisses technical and fundamental analysis as means of "predicting" future price movements. Also, it establishes that if the market is semi-strong efficient, it will be strong efficient.