Technical analysis, which is defined as the analysis of historical trends of prices, is an important field in finance.Which form of efficiency is this field based on?
A)Weak form inefficiency
B)Semi-strong form inefficiency
C)Strong form inefficiency
D)It has nothing to do with efficiency.

Question

Quizplus · Accepted Answer

Technical analysis operates under the assumption that all publicly available information is already reflected in stock prices, except for historical price and volume information. It suggests that one can gain an edge in the market by analyzing past price movements, which implies that markets are not efficient at reflecting all past trading information in current prices. This aligns with the concept of weak form inefficiency, where the market is inefficient in reflecting all historical price and volume information in current prices.

Technical Analysis, Which Is Defined as the Analysis of Historical