Question

Which of the following statements is most correct?

Question options:

A) Semistrong-form market efficiency means that stock prices reflect all public information, and thus analyzing public information may not lead to an abnormal return.

B) An individual who has information about past stock prices should be able to profit from this information in a weak-form efficient market.

C) An individual who has inside information about a publicly traded company should be able to profit from this information in a strong-form efficient market.

D) All the statements above are correct.

The total return on a share of stock for a given period refers to the sum of dividend yield plus capital gains yield during the period.

Question options:

	True
	False

Answer 1

Semi-strong form market efficiency assumed that current stock prices adjust rapidly to the release of all new public information.Hence,statement mentioned in 'A' above is most correct.I

It is claimed that in a weak form efficient market past price movements do not affect a stock price and can't be used to predict it's future direction.Hence statement mentioned in 'B' is in correct.

It is claimed that in a strong form efficient market even insider information can not give any advantage to the investor.Hence, statement mentioned in 'C' is incorrect.

It is True that total return on a share of stock for a given period refer to sum of dividend yield plus capital gains yield during the perion