Semi-strong form efficiency is a stronger form of efficiency than weak form efficiency since price histories are also public information.
Question
Semi-strong form efficiency is a stronger form of efficiency than weak form efficiency since price histories are also public information.
Solution
The statement you provided is correct. In the context of the Efficient Market Hypothesis (EMH), there are three forms of market efficiency: weak, semi-strong, and strong.
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Weak Form Efficiency: This is the weakest version of EMH. It suggests that all past prices of a stock are reflected in today's stock price. Therefore, technical analysis cannot be used to predict and beat the market.
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Semi-Strong Form Efficiency: This form of EMH implies that all public information is calculated into a stock's current share price. Besides past prices, this also includes data reported in a company's financial statements (earnings, liabilities, assets etc.), announced plans for future operations, levels of risk, and everything else that a company has disclosed to its shareholders. Therefore, neither fundamental nor technical analysis can be used to achieve superior gains.
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Strong Form Efficiency: This is the strongest form of EMH and suggests that all information, public and private, is completely accounted for in a stock's current market price. It implies that even insider information cannot give an investor an advantage.
So, yes, semi-strong form efficiency is a stronger form of efficiency than weak form efficiency because it includes more information (all publicly available information, not just past prices) in the calculation of a stock's current price.
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