If the weak form of efficient markets holds,then:
A) technical analysis is useless.
B) stock prices reflect all information contained in past prices.
C) stock prices follow a random walk.
D) All of these.
E) None of these.

Question

Quizplus · Accepted Answer

If the weak form of efficient markets holds, it means that all past information, including past prices, is already reflected in current stock prices. Therefore, technical analysis (which relies on past prices to predict future price movements) would be useless. Stock prices would follow a random walk, as they would incorporate all available information and respond to new information as it becomes available. All of these statements are true if the weak form of efficient markets holds.

If the Weak Form of Efficient Markets Holds,then