In a semi-strong-form efficient market, prices reflect all publicly available information.
This includes past market data, company earnings, dividends, financial statements, stock splits, merger news, and other public announcements. If the market is semi-strong efficient, investors cannot consistently earn abnormal returns by analyzing public information.
Example:
Suppose a company announces earnings of ₹150 crore, while investors expected only ₹120 crore.
This is positive public information. In a semi-strong efficient market, the stock price may quickly rise from ₹800 to ₹880 as soon as the news is released.
If an investor buys after the announcement, they may not earn abnormal profit because the price has already adjusted.
So, semi-strong efficiency means public information is quickly reflected in market prices.
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