Your best friend works in the finance office of the Delta Corporation.You are aware this friend trades Delta stock based on information he overhears in the office but which is not known to the general public.Your friend continually brags to you about the profits he earns trading Delta stock.Based on this information,you would tend to argue that the financial markets are at best ________ form efficient.
A)weak
B)semiweak
C)semistrong
D)strong
E)perfect

Question

Quizplus · Accepted Answer

The semistrong form of market efficiency suggests that all publicly available information is reflected in stock prices, but not private or insider information. Since your friend profits from non-public information, the market is not strong form efficient.

Your Best Friend Works in the Finance Office of the Delta