The main difference between the three forms of market efficiency is that
A)the definition of efficiency differs.
B)the definition of excess return differs.
C)the definition of prices differs.
D)the definition of information differs.

Question

Quizplus · Accepted Answer

The main difference between the three forms of market efficiency (weak, semi-strong, and strong) lies in the definition of information and what is already reflected in stock prices. Weak form efficiency suggests that all past trading information is reflected in stock prices, semi-strong form efficiency suggests that all publicly available information is reflected, and strong form efficiency suggests that all information, including insider information, is reflected in stock prices.

The Main Difference Between the Three Forms of Market Efficiency