There have been cases where people with inside information have illegally traded in the stock market, earning disproportionately high returns. What does this suggest?

Question

Quizplus · Accepted Answer

The existence of insider trading and the ability to earn disproportionately high returns from it suggest that the strong form of efficiency, which posits that all information (public and private) is already reflected in stock prices, probably does not hold. This is because insiders are able to exploit private information for profit, indicating that not all information is reflected in the market prices.

There Have Been Cases Where People with Inside Information Have