Which form of the Efficient Market Hypothesis believes all public information is reflected in stock prices?

The semi-strong form of the Efficient Market Hypothesis posits that all publicly available information is instantly and accurately reflected in stock prices. This includes not only historical price data but also all pertinent financial reports, news releases, and any other public disclosures.

Under this hypothesis, if there's any new public information released regarding a company, stock prices will adjust immediately to reflect this new information, ensuring that no investor can achieve excess returns consistently through analysis of public data. This contrasts with the weak form, which suggests that only past prices are reflected in the current price, and the strong form, which claims that all information, both public and private (inside information), is reflected in stock prices.

Therefore, semi-strong form is significant because it emphasizes the role of publicly available information in market efficiency, allowing investors to understand that due to the immediate incorporation of news into stock prices, simply analyzing public information won’t yield a reliable investment advantage.