There is a statement that
Under strong form hypothesis of market efficiency share prices reflect all available information about past changes in share price
And this statement is false. Can you please explain me why this statement is false because
Under strong form hypothesis of market efficiency share prices reflect all information, whether it is
publicly available or not:
From past price changes
From public knowledge or anticipation
From specialists' or experts' insider knowledge eg the inside knowledge of investment managers
So as per this description the above statement should be true instead of false.
Please note that in the above statement they have not mentioned that Under strong form hypothesis of market efficiency share prices ONLY reflect all available information about past changes in share price, if this was the case then surely the above statement would be regarded as false
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MCQ in BPP book
7y ago#1Please tell me the number of the question in the Revision Kit.
Sir its in BPP study text , practice question and answer bank ,section A MCQ 30
7y ago#3I do not have the Study Text and so I cannot check the exact wording of the question.
See question 241 in the current edition of the BPP Revision Kit.
Sir in question 241 in BPP Revision Kit The statement is that
"Under weak form hypothesis of market efficiency share prices reflect all available information about past changes in share price"
And this statement is true, and I have understood it
But in BPP study text , practice question and answer bank ,section A MCQ 30 The statement is that
"Under strong form hypothesis of market efficiency share prices reflect all available information about past changes in share price"
Here they have regarded this statement as false. But in my opinion this statement should also be true
7y ago#5I accept that it seems that the wording in the Study Text could be better, but again I do not have the Study Text and so cannot see the while of the question.
Because under strong form hypothesis of market efficiency share prices reflect all information, whether it is publicly available or not:
From past price changes
From public knowledge or anticipation
From specialists’ or experts’ insider knowledge eg the inside knowledge of investment managers
Sir in question 241 in BPP Revision Kit The statement is that
"Under weak form hypothesis of market efficiency share prices reflect all available information about past changes in share price"
And this statement is true, and I have understood it
But in BPP study text , practice question and answer bank ,section A MCQ 30 The statement is that
"Under strong form hypothesis of market efficiency share prices reflect all available information about past changes in share price"
Here they have regarded this statement as false. But in my opinion this statement should also be true because
Under strong form hypothesis of market efficiency share prices reflect all information, whether it is publicly available or not:
From past price changes
From public knowledge or anticipation
From specialists’ or experts’ insider knowledge eg the inside knowledge of investment managers
7y ago#8As I replied before, I cannot check the question in the Study Text. As I also said before, it seems that the wording in the Study Text could have been improved, but I did not write the BPP Study Text.
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