Question

14. Which type of market efficiency is an "event study" designed to test?

Group of answer choices

a. Weak form efficiency.

b. Semi-strong form efficiency.

c. Strong form efficiency.

d. All of the above

Answer 1

Semi strong form of market will be trying to factor into event studies and they will be trying to advocate that how fast the market is trying to react into some abnormal events and trying to discount that into the price so these are just the the reflection of same efficient form of market where the insider information have not been discounted.

weak form of market efficiency advocates that abnormal return cannot be made and strong form of market return also advocate that have abnormal return cannot be made.

Correct answer will be option ( b) semi-strong form of market efficiency.