Which one of these serial coefficient values is most consistent with weak form market efficiency?
A)-1
B)-0.5
C)0
D)+0.5
E)+1

Question

Quizplus · Accepted Answer

A serial coefficient of 0 indicates that there is no correlation between past and future returns, which is consistent with weak form market efficiency. The other coefficients indicate varying levels of positive or negative correlation, which would suggest that past returns can be used to predict future returns, contradicting weak form efficiency.

Which One of These Serial Coefficient Values Is Most Consistent