- CFA Exams
- CFA Level I Exam
- Study Session 12. Equity Investments (1)
- Reading 38. Market Efficiency
- Subject 2. Forms of Market Efficiency
CFA Practice Question
The strong form of the efficient market hypothesis states that ______
II. insider information contains no special advantage.
III. major market events can be predicted.
I. security prices reflect all publicly available information.
II. insider information contains no special advantage.
III. major market events can be predicted.
A. II only
B. I and II
C. I and III
User Contributed Comments 6
User | Comment |
---|---|
zwer | I assume, all public + non-public information produces "yes" for just public information. |
kalps | Strong form includes public information as well |
shasha | i agree, 'coz obviously both I & II are for strong form. but how about III? believing it should do nothing with emh, it's eco concept, isn't it? |
PeterW2006 | Strong form of the efficient market hypothesis = all public and private information. Forgive me for thinking aloud, but is it possible that this could be a trick question? Strong Form of EMH states that security prices fully reflect all information from public and private sources, and NOT security prices reflect all publicly available information. I answered A thinking this could be a trick question. |
teddajr | Strong form is inclusive of semi-strong, and semi-strong form is inclusive of weak form. |
Sanghamitra | all hypothesis are based on major market events cannot be predicted (i think). |