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Hi sir, i have watched your lecture regarding this topic, but i would like to ask regarding the Market efficiency Hypothesis from the past year question relating to this statement:
Ring Co’s share price reacts quickly and accurately to newly-released information in a semi-strong form efficient capital market but not in a weak form one.
I did not have clear understanding in relation to the fact that share price did not quickly and accurately reflect to the weak form information, while semi-strong form did.
Can you explain it to me? It comes from this past year question:
https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f9/exampapers/f9-2016-sep-q.pdf
Choice (2) in the question is not correct. The share price will react to new information, but we cannot say it will happen ‘the day after it is announced’, which is what is written in the statement. It will take time before the share price reacts, whereas in a semi-strong efficient market the share price will react quickly (although even then we would not say that it will be the day after – it is likely to react sooner than that).
Thank you for your explanation above, but I’m so sorry, i would like to clarify again
Does it means that the share price would react for weak form information LATER THAN semi-strong information?
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