Question

The CFO of a certain company always wears his green suit on a day that the firm is about to release positive information about his company. You believe that you can profit from this information by buying the firm's shares at the beginning of every day that the CFO shows up wearing this green suit. Describe which form of market efficiency is consistent with your belief.

Answer 1

Answer:

Semi strong form of market efficiency

Explanation:

Semi strong form of market efficiency holds the belief that security prices quickly adjust to reflect new information as it has accommodated public and  available and private market information , as a result of which the need for deeper analysis of stock  before investment might not be required.

As it is already known that a green suit on the CFO signifies a potential positive information about the company, making use of this private information towards investment is in line with the Semi strong form of market efficiency .