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28 Sep 2019
The semi-strong form of the efficient market hypothesis asserts that all publicly available information is rapidly and correctly reflected in securities prices. This implies that investors cannot expect to derive above-average profits from purchases made after the information has become public because security prices already reflect the information's full effects.
a. Identify and explain two examples of empirical evidence that tend to support the EMH implication stated above.
b. Identify and explain two examples of empirical evidence that tend to refute the EMH implication stated above.
c. Discuss reasons why an investor might choose not to index even if the markets were, in fact, semi-strong form efficient.
The semi-strong form of the efficient market hypothesis asserts that all publicly available information is rapidly and correctly reflected in securities prices. This implies that investors cannot expect to derive above-average profits from purchases made after the information has become public because security prices already reflect the information's full effects.
a. Identify and explain two examples of empirical evidence that tend to support the EMH implication stated above.
b. Identify and explain two examples of empirical evidence that tend to refute the EMH implication stated above.
c. Discuss reasons why an investor might choose not to index even if the markets were, in fact, semi-strong form efficient.
Joshua StredderLv10
28 Sep 2019
