Which of the following situations is consistent with the strong- form version of the efficient markets hypothesis?

Question

Quizplus · Accepted Answer

The strong-form version of the efficient markets hypothesis posits that all information, public and private, is fully reflected in stock prices. Therefore, it suggests that nobody can consistently outperform the market by trading on information that is not publicly available, including investment fund managers who have access to private information. Thus, option A is the only situation consistent with the strong-form version of the efficient markets hypothesis. Options B, C, and D suggest that an individual can consistently earn abnormal returns by trading on certain types of information, which contradicts the strong-form version of the efficient markets hypothesis.

Which of the Following Situations Is Consistent with the Strong-