The most relevant form of market efficiency to financial reporting is:
A) the weak form.
B) the semi-strong form.
C) the strong form.
D) None of the options is correct.

Question

Quizplus · Accepted Answer

The semi-strong form of market efficiency is the most relevant to financial reporting because it states that all publicly available information is reflected in current stock prices. This includes financial reports, news announcements, and other publicly available information. Therefore, if a company releases its financial reports, the stock price should reflect this information without delay. This is important for investors as they rely on this information to make informed investment decisions.

The Most Relevant Form of Market Efficiency to Financial Reporting