ACCA FM · Chapter 13 · Question 5 of 9
Which of the following would be true ONLY if a stock market were strong form efficient?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Directors trading on unpublished price-sensitive information would be unable to earn abnormal returns
Explanation
Strong form efficiency means share prices reflect all information, public and private, so even insiders could not profit from their knowledge. The other statements are already true under weak form (past prices) or semi-strong form (published information) efficiency, which are implied by, but do not require, strong form efficiency.
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