Most evidence indicates that U.S. stock markets are _____.

a) neither weak-, semistrong-, nor strong-form efficient.

b) strong-form efficient.

c) reasonably weak-form but not semistrong- or strong-form efficient.

d) reasonably weak-form and semistrong-form efficient.

Expert Solution

The answer is option D.

The semi-strong efficient market theory suggests all information available in the public domain is used to find the intrinsic value or the fair value of stock hence only insider information could bring an anomaly that holds true for the US markets as insider information or trading is illegal therefore banned. So an investor could possibly use only the public domain information.

Reasonably weak because this theory suggests that although stock price reflects all the information but there can be anomalies found in the research of researching companies due to their assumptions or methods of valuation.

jeff jeffy answered 2 years ago

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Question

Most evidence indicates that U.S. stock markets are _____.

Solutions

Expert Solution

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