Question

1. Most academic research supports markets as                 efficient.
   1. not at all
   2. weak form
   3. strong form
   4. semi-strong form

Answer 1

Option D. semi-strong form is the correct answer

Explanations: -

Most academic research supports markets as semi-strong form efficient. The theory of market efficiency in which markets quickly reflect to the information that are relevant to the value of a security is called efficient market hypothesis theory. it has three forms, namely strong form, semi-strong form and weak form. According to the semi-strong form all publicly available information’s are incorporated in a security price. therefore an investor cannot use publicly available information to identify mispriced securities. here the academic research is publicly available information which is reflected in a securities price. If a market is semi-strong form efficient, then it is also weak form efficient since past prices and other past trading data are publicly available.