What is the key characteristic of an efficient capital market according to the Strong-Form Efficient Market Hypothesis (EMH)?
AShare prices are predictable using technical analysis
BShare prices reflect historical price patterns only
CShare prices reflect all publicly available news information
DShare prices reflect all public and private (insider) information
Explanation
* Strong-Form EMH states stock prices fully reflect all information, public and private (insider).
* Weak-Form EMH: reflects only historical price and volume data (technical analysis ineffective).
* Semi-Strong Form EMH: reflects all public information (fundamental analysis ineffective).
Exam Relevance
- Topic: Financial Markets
- Subtopic: Efficient Market Hypothesis (EMH)
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