Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Define semistrong form of market efficiency
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Step 1
Answer:
Efficient market is one where the market price constitutes a balanced estimate of investment’s true value. Market efficiency doesn’t require that at every point in time the market price be equal to the true value. It requires that market price errors have to be unbiased.
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