Efficient market hypothesis


Problem:

Stock prices fluctuate daily. In relation to the efficient market hypothesis, these fluctuations are:

  • Consistent with the strong form because prices and information are controlled by insiders.
  • Consistent with the semi strong form because new information arrives daily.
  • Consistent with all forms of market efficiency provided the prices do fluctuate on a daily basis.
  • Inconsistent with all forms of market efficiency.
  • Inconsistent with the semistrong form of efficiency because prices should be stable.

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Finance Basics: Efficient market hypothesis
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