Question

Explain the Semi-Strong Form with examples.

Explain the Semi-Strong Form with examples.

Homework Answers

Answer #1

Semi Strong form of Efficiency refers to the scenario when the share price reflects all the public information in the share price, means all the Material news available are quickly absorbed by the share. In this form of efficiency, the technical analyis and fundamental analyis would not work as there will be no Underprice or overprice share as market will correct them, If the individual want to earn more return than the market then he should have Material Non Public Information.

Example: Let's Assume Facebook share trading at $100, Now, The News came that Facebook Profit jumps by 20% on Year on Year basis, Now, when the next days the trading will open this news will reflect in the share price and it will increase by around 20%.

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