What if the efficient market hypothesis is interpreted in a weak form a semistrong form and a strong form How can you differentiate its various forms?

Answer

The efficient market hypothesis (EMH) states that at any given time, security prices fully reflect all available information. There are three common forms to describe the efficiency of the market: Weak form efficiency, Semi-strong form efficiency and Strong form efficiency, each of which have different implications for how markets work. But if markets are efficient and current prices fully reflect all information, then buying and selling securities in an attempt to outperform the market will effectively be a game of chance rather than skill.

1.The "Weak" form asserts that all past market prices and data are fully reflected in securities prices. In other words, technical analysis is of no use.

2.The "Semistrong" form asserts that all publicly available information is fully reflected in securities prices. In other words, fundamental analysis is of no use.

First answer by P.Y.Chen. Last edit by Daisymagana88. Contributor trust: 0 [recommend contributor]. Question popularity: 23 [recommend question]