What are the weak strong and semi-strong efficient market hypotheses?

What are the weak strong and semi-strong efficient market hypotheses?

Though the efficient market hypothesis theorizes the market is generally efficient, the theory is offered in three different versions: weak, semi-strong, and strong. The weak form suggests today’s stock prices reflect all the data of past prices and that no form of technical analysis can aid investors.

Can a market be weak form efficient and semi-strong inefficient?

If a market is semi-strong form efficient, then it is also weak form efficient since past prices and other past trading data are publicly available. Example: Market reaction to public announcement. expected reserves (extra value = $10 per share).

What is the difference between the weak form efficiency and the semi-strong form efficiency?

In weak-form efficiency, future prices cannot be predicted by analyzing prices from the past. In semi-strong-form efficiency, it is implied that share prices adjust to publicly available new information very rapidly and in an unbiased fashion, such that no excess returns can be earned by trading on that information.

What is the semi-strong form of market efficiency?

Semi-strong form efficiency refers to a market where share prices fully and fairly reflect all publicly available information in addition to all past information.

Does strong form efficiency imply weak form efficiency?

The strong form efficiency holds that the overall market is affected by past events of market history and not just random occurrences. In contrast, the weak form efficiency maintains that the overall market is not influenced by past events. That means, current price movements and trends are not affected by past events.

Are markets weak form efficient?

Weak-form of market efficiency states that current market prices fully reflect all past market data. This implies that investors cannot predict future price changes by extrapolating prices or patterns of prices from the past.

What are examples of strong and weak forms?

Function words have both strong and weak forms in English