The hypothesis that market prices reflect all available information of every kind is called ________ form efficiency.
A)open
B)strong
C)semistrong
D)weak
E)stable

Question

Quizplus · Accepted Answer

Strong form efficiency assumes that all information, whether public or private, is reflected in market prices, including insider information. This hypothesis is the strongest form of market efficiency, and therefore, the market is considered most efficient under it. The other forms of efficiency (weak, semi-strong, and open) make assumptions regarding the availability of certain types of information that are not as strict as those in strong form efficiency.

The Hypothesis That Market Prices Reflect All Available Information of Every