The U.S.Securities and Exchange Commission periodically charges individuals for insider trading and claims those individuals have made unfair profits.Based on this fact,you would tend to argue that the financial markets are at best ________ form efficient.
A)weak
B)semiweak
C)semistrong
D)perfect
E)strong

Question

Quizplus · Accepted Answer

The semistrong form of market efficiency posits that all publicly available information is already reflected in stock prices, including news and financial reports. If the SEC charges individuals for insider trading, it implies that these individuals are profiting from information not yet public, suggesting that not all available information is reflected in stock prices. This undermines the notion of strong or perfect efficiency, aligning more with semistrong efficiency, where markets are efficient to a point but can still be exploited with non-public information.

The USSecurities and Exchange Commission Periodically Charges Individuals for Insider Trading