- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 3. Market Efficiency
- Subject 2. Forms of Market Efficiency
CFA Practice Question
Strong-form efficiency states that the market incorporates any and all pertinent information in stock prices. Strong-form efficiency implies that ______
B. an insider or corporate officer cannot outperform any other investor by trading on the inside information.
C. any investor can outperform the market by trading on publicly available information.
A. an investor can always rely on technical analysis.
B. an insider or corporate officer cannot outperform any other investor by trading on the inside information.
C. any investor can outperform the market by trading on publicly available information.
Correct Answer: B
User Contributed Comments 10
| User | Comment |
|---|---|
| cgeek | why insider can not? shrong form include private source of information, including inside info. !! |
| zwer | The market already uses inside information (contrast to weak and semi-strong) |
| jamiejamie | strong form implies an equal playing field for investing in a stock, regardless of whether you are the CEO or a beginner investor. |
| Damy4real | Thanks jamiejamie...clear answer.! |
| accounting | take note this is a strong form |
| chezyfive | But in reality, is that the case? |
| Fotsta | of course not,in reality this is not the case chezyfive |
| johntan1979 | Exactly. You don't see new Toms, Dicks and Harrys on the investing news front page every day, do you? |
| janglejuic | what a bull crap hypothesis |
| thevinu | doesn't exist irl basically. just for the books |