Strong form level of Efficiency
This level states that price reflects all the available public and private information (past, present and future information). If the hypothesis is correct, then, the mere publication of information that was previously confidential should not have impact on share prices. This implies that insider trading is impossible. It follows therefore, that in order to maximize shareholders’ wealth, managers should concentrate on maximizing the NPV of each investment. Tests that have been carried out on this level have concentrated on activities of fund managers and individual investors. If the markets have reached the strong form levels, then fund managers cannot consistently perform better than individual investors in the market.