Question

You are the chief financial officer of davidson industries. on multiple occasions, you have engaged in insider trading but have never been able to earn any abnormal returns. which form of market efficiency most likely exists given your situation?

Answer 1

In the scenario given above, the most likely form of market efficiency that probably exist is STRONG FORM MARKET EFFICIENCY. There are three different types of market efficiency, these are: weak form, semi strong form and strong form. Strong form market efficiency is the strongest form of market efficiency. Market efficiency refers to the extent to which stock prices and other securities prices reflect all available relevant information.