Question

If the financial markets are semi-strong form efficient, then:A. only the most talented analysts can determine the true value of a security.B. only individuals with private information have a marketplace advantage.C. technical analysis provides the best tool to use to gain a marketplace advantage.D. no one individual has an advantage in the marketplace.

Answer 1

Answer:

B. only individuals with private information have a marketplace advantage

Explanation:

• Semi-Strong market efficiency is the type of financial market effect that states that the security prices quickly adjust to the newly available information thus eliminating the need for fundamental or technical analysis.

• As at any given point of time the liquidity of the market and the security prices fully reflect all the available information. Thus the strong form of the semi market also states that the current stock prices tend to show all the public and private information.  

• It states that the non-market and the insider information as well as the market information are stored in the security prices and that none have monopolistic access to the information.