Question
The 'Semi-Strong Form' of the Efficient Market
Hypothesis (EMH) states that stock prices reflect:Solution
- The EMH has three forms, distinguished by what information is reflected in prices:
- Weak Form:  Prices reflect all historical market data  (past prices, volumes). Technical analysis cannot consistently yield profits.
- Semi-Strong Form:  Prices reflect all publicly available information . This includes historical data, financial statements, news, announcements, etc. Neither technical nor fundamental analysis can yield consistent excess returns.
- Strong Form:  Prices reflect all information, public and private (insider) . Even insider information cannot yield consistent profits. This is considered an extreme form.
In a market economy
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