Which of the following statements correctly describes a strong form efficient market?

Question

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In a strong form efficient market, all information, including insider information, is reflected in a security's price, making it impossible for anyone to consistently earn abnormal returns. Therefore, only a fair return, which compensates for the risk taken by the investor, is possible in such a market. The use of technical analysis is also not successful in finding mispriced securities in a strong form efficient market. Option A is incorrect because anyone with insider information cannot earn abnormal returns in a strong form efficient market. Option C is incorrect because technical analysis cannot be used to find mispriced securities in a strong form efficient market. A strong form efficient market suggests that all information, both public and private, is reflected in the market prices. This means that even those with insider information cannot expect to earn abnormally high returns since the information is already priced into the market. Additionally, the use of technical analysis to find mispriced securities is also not possible in a strong form efficient market. Therefore, the only way for an investor to earn a return over and above a fair return that compensates for risk is through luck. Thus, statement B correctly describes a strong form efficient market.

Which of the Following Statements Correctly Describes a Strong Form