A. Semi-strong form of market efficiency requires that the price does not drift prior to the announcement.

B. Strong form of market efficiency implies that one cannot forecast where the price will end up after the announcement.

C. Under semi-strong form of market efficiency, it is possible that taking a position in the target stock before the announcement generates abnormal risk-adjusted returns.

D. This violates the weak form of market efficiency, because the stock reaction to the announcement is positive on average.
 

The following figure shows the cumulative abnormal returns (CAR) on a target company's stock before and after a takeover announcement: Cumulative abnormal return 36.000 32.000 28.000 24.000 20.000 16.000 12.000 8.000 4.000 0.000