The evidence from takeover announcements supports the semi-strong form of market efficiency, while the evidence from...

The evidence from takeover announcements supports the semi-strong form of market efficiency, while the evidence from earnings announcements supports just the weak form of market efficiency. (True or false)?

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Expert Solution

Ans: True

1) Reason: Weak form efficiency states that past prices, historical values and trends can't predict future prices. Weak form efficiency is an element of efficient market hypothesis. Weak form efficiency states that stock prices reflect all current information.

2) Strong form efficiency is the most stringent version of the efficient market hypothesis (EMH) investment theory, stating that all information in a market, whether public or private, is accounted for in a stock's price.

jeff jeffy answered 1 year ago

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