Weak 11 - Semi-strong Form Efficiency

Question 1

Define semi-strong form efficiency

Answer 1

SSF efficiency would exist if it were impossible to make abnormal profits by relying on the analysis of publicly available information

Question 2

What is the simple definition of semi-strong form efficiency?

Answer 2

All publicly available information—including financial statements, news reports, economic indicators, press releases, etc.—is already reflected in stock prices.

Question 3

What is the price like?

Answer 3

All publicly available information (Not just the price history) is accounted for in the current market price

Question 4

Which markets are semi-strong efficient?

Answer 4

The world’s leading markets

Question 5

How do you test to see if the efficient market hypothesis is semi-strong efficient?

Answer 5

See how quickly market reacts to new information (news announcements) - this can be done through events studies