There are three degrees of market efficiency. All of the following statements ar

Question

There are three degrees of market efficiency. All of the following statements are correct EXCEPT O a. The weak form efficiency states that no investor can earn excess returns based on historical price or return information b. Market efficiency is a hard and fast rule that has been verified in real-world situations C. The strong form of efficiency states that no investor can consistently earn excess returns since all public and private information is reflected in stock prices d. The semi-strong form of efficiency states that no investor can earn excess returns based on an investment strategy using publicly available information

Explanation / Answer

The answer is b.

Professor Eugene Fama, who is considered the father of father of efficient market hypothesis, states that is a model and not a rule. It describes how a model is intended to work. It does not state how a market should work.

I hope that was helpful :)

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