question archive White looking at the historical stock returns of companies that have undergone mergers, you notice that the prices of the acquired companies have already started climbing up in the days prior to the announcement of the merger
White looking at the historical stock returns of companies that have undergone mergers, you notice that the prices of the acquired companies have already started climbing up in the days prior to the announcement of the merger
Subject:FinancePrice:2.88 Bought15
White looking at the historical stock returns of companies that have undergone mergers, you notice that the prices of the acquired companies have already started climbing up in the days prior to the announcement of the merger. This finding violates of the efficient markets hypothesis Multiple Choice no form O the semi-strong form the strong form the weak form all forms
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The correct answer is Semi strong
Semi strong form of efficiency shows that share price accumulates and adjust to the price quickly to the reaction of any public informatio, However, it also states that the investor who has non material public information can earn abnormal return as it doesn't gets accounted before releasing, But, in this case it is happening. Thus, this violates semi strong efficiency.
