CFA Practice Question

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CFA Practice Question

Strong-form efficiency states that the market incorporates any and all pertinent information in stock prices. Strong-form efficiency implies that ______

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 9

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
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