Which of the following theories states that security prices reflect all information, whether public or private?
A) Weak-form efficiency.
B) Semistrong-form efficiency.
C) Strong-form efficiency.
D) Nominal-form efficiency.

Question

Quizplus · Accepted Answer

The theory of strong-form efficiency asserts that all information, whether public or private, is already reflected in the security prices. Thus, insider trading is not possible in a world of strong-form efficiency. Weak-form efficiency only considers past prices and trading volume, while semistrong-form efficiency takes into account publicly available information. Nominal-form efficiency is not a recognized concept in finance.

Which of the Following Theories States That Security Prices Reflect