Which of the following would invalidate the weak form of the efficient market hypothesis.
A) Patterns in price behavior that consistently predict future price movements.
B) Market analysis proves useful in discovering investment opportunities.
C) Stocks of smaller firms consistently outperform larger firms.
D) Shortly before she is arrested, a pharmaceutical company researcher makes a large profit on her company's stock by buying just before a new drug is approved by the Food and Drug Administration.

Question

Quizplus · Accepted Answer

The weak form of the efficient market hypothesis suggests that past price movements and volume data do not predict future price movements. If patterns in price behavior consistently predict future price movements, it would invalidate the weak form.

Which of the Following Would Invalidate the Weak Form of the Efficient