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State and explain three forms of market hypothesis that are available in the real world.

State and explain three forms of market hypothesis that are available in the real world.

Solutions

Expert Solution

Weak form market hypothesis. This hypothesis suggest that current prices in the market reflects past historical data without any form of analysis that can help investors.

Semi strong market hypothesis. This hypothesis suggest current market prices reflects all public information available and historical information about market prices.

Strong market hypothesis. This hypothesis suggest that current market prices fully reflects information available in public and private companies. Insiders of a firm can’t generate abnormal profits by accessing private information because it is already in the market

1. Weak form market hypothesis

2.Semi-strong market hypothesis.

3.Strong market hypothesis

Evans KIptoo answered 3 years ago
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