Homework Answers
Answer: 3rd option
This is strong form efficiency.
It is so because past events (earlier stock price, reputation of the firm, and earlier operational activities) influence the current market price. In this way a stock price reacts with all the available information. Suppose a stock price increases in the market, since in the last year an expansion took place.
Other options are not correct:
1st option: this is applicable in case of public information only but not private information.
2nd option: this is applicable if there is no information; therefore, just opposite of strong form efficiency.
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