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Market Ffficienrv a . Refer to the attached figure and assume the market is semistrong - form efficient. What was the price of SPB '
Market Ffficienrv
a Refer to the attached figure and assume the market is semistrongform efficient. What was the price of SPBs stock at : am
The price of SPBs stock at : am was $
Round the final answer to the nearest cent. Round all intermediate values to six decimal places as needed.
information is incorporated very quickly into stock prices, is often
called semistrongform market efficiency. The term "semistrong" indicates that
it is not as complete as strongform market efficiency, where prices
immediately incorporate all information, including private information known,
for example, only to managers. Finally, the term "weakform market efficiency"
means that only the history of past prices is already reflected in the stock price.
It helps to think of the different forms of market efficiency as meaning that
prices incorporate a steadily increasing set of information and that each of
these forms encompasses all the lower forms. For example, since the history
of past prices is public information, semistrongform efficiency
encompasses weakform. The diagram illustrates the idea. In the diagram, the
information sets of weakform, semistrongform, and strongform efficiency are
represented by the blue, green, and yellow circles, respectively.
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