W co announces that it decided yesterday to invest in a project with huge positive NPV. The share price doubled yesterday
What does this appear to be evidence of
- Strong form
- Semi strong form
- Technical analysis
- Weak form efficient
Sir the correct ans is strong form. But what could be the most likely reason for being strong form? Is it because yesterday it decided to invest in project and share price already occurred yesterday, hence market cannot be beaten even by the insider dealing and therefore market is strong form efficient? Is thinking this as a reason , correct? If not, then please you correct me with the appropriate reason.
Thanks
Ask the Tutor ACCA FM
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7y ago#1What you have written is correct. The decision was only made public today, but the share price increased yesterday.
But on second thought this thing also comes in my mind that as decision was made public today, but the share price increased yesterday, so it implies Semi strong market because market cannot be beaten with the info which is publicly available but still can be beaten by insider dealing , so isn't semi strong market more appropriate here rather than strong market?
I always get confused in deciding between semi strong market and strong market. I have also watched your lecture on this. But still I cannot identify clearly between semi strong market and strong market.Can you please tel any clue by which I can clearly differentiate between semi strong market and strong market? I will be very thankful to you
7y ago#3With semi-strong markets, the share price reacts to publicly available information. Yesterday the information was not publicly available but the share price still doubled.
If it was semi-strong, the price would not have changed because the information was not publicly available.
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