If the Semistrong form of the Efficient Markets Hypothesis i

If the Semi-strong form of the Efficient Markets Hypothesis is true, can fundamental valuation techniques improve an investor’s performance? Explain.

Solution

The semi strong form postulates that the market prices in all available information and any public information cannot be used to obtain additional value. In case of fundamental valuation techniques, the balance sheet and income statements are already available in public and the price takes into account these figures. So in this form of efficiency it is not possible to improve an investor\'s performance.