Event studies are used to test the
A) Weak-form efficient market hypothesis (EMH).
B) Semistrong-form efficient market hypothesis (EMH).
C) Strong-form efficient market hypothesis (EMH).
D) Both b and c
E) All of the above.

Question

Quizplus · Accepted Answer

Event studies are used to test the semistrong-form efficient market hypothesis (EMH). This hypothesis suggests that all publicly available information is quickly and fully reflected in security prices. Event studies examine the impact of a particular event (such as an earnings announcement or merger announcement) on a security's price and whether the market's reaction to the event was immediate and efficient.

Event Studies Are Used to Test the