If the financial markets are __________ efficient, then laws prohibiting insider trading are unnecessary.
A) mild-form
B) weak-form
C) historical-form
D) semi-strong form
E) strong-form

Question

Quizplus · Accepted Answer

The strong-form market efficiency assumes that all information, including insider information, is fully reflected in the current prices of the assets. Therefore, if the financial markets are strong-form efficient, there would be no advantage to trading on insider information, and laws prohibiting insider trading would be unnecessary.

If the Financial Markets Are __________ Efficient, Then Laws Prohibiting