Semistrong Form of the Efficient Markets Theory

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Semistrong Form of the Efficient Markets Theory

A controversial model on how markets work. It states that the market efficiently deals with nearly all information on a given security and reflects it in the price immediately. The model holds that technical analysis, fundamental analysis, and any speculative investing based upon them, are useless because any facts that might cause technical or fundamental changes are already reflected in the security price. Investors and academics disagree on how well the model works. See also: Weak form of the EMT, Strong form of the EMT.
References in periodicals archive ?
The conditional volatility of the changes are significantly reduced by bigger absolute values of reported earnings before the news announcement and increased afterwards, supporting the rejection of semi-strong-form efficiency.
Many studies on the semi-strong-form efficiency of stock market are focused on the analysis of the information content of annual earnings and dividend announcements.
In testing the features of the semi-strong-form efficiency in the Chinese stock markets in terms of the return of annual earnings announcement, an M-EGARCH model has been applied.