The correct answer is: D. strong form efficiency.
Strong form efficiency is the highest level of market efficiency. It states that all information, including public and private information, is reflected in the current market price of a security. This means that it is impossible to consistently outperform the market by using any information, including insider information.
Weak form efficiency states that all past price information is reflected in the current market price of a security. This means that it is impossible to consistently outperform the market by using technical analysis, which is the study of past price movements.
Semi-strong form efficiency states that all publicly available information is reflected in the current market price of a security. This means that it is impossible to consistently outperform the market by using fundamental analysis, which is the study of a company’s financial statements and other publicly available information.
A random walk is a mathematical model of a series of random numbers. In the context of financial markets, a random walk would mean that the price of a security is unpredictable and cannot be predicted based on past price movements or any other information.
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