The weak form of the efficient market hypothesis denies the use of:
A) technical analysis, but supports fundamental analysis as valid.
B) fundamental analysis, but supports technical analysis as valid.
C) both technical analysis and fundamental analysis.
D) technical analysis, but is silent on the possibility of successful fundamental analysis.

Question

Quizplus · Accepted Answer

The weak form of the efficient market hypothesis asserts that any publicly available information has already been incorporated into the current stock price. Therefore, technical analysis, which attempts to predict future price movements based on past market data, would be ineffective. The weak form hypothesis is silent on the possibility of successful fundamental analysis, which involves analyzing a company's financial and economic information to estimate its future performance. However, some proponents of the efficient market hypothesis argue that even fundamental analysis is unlikely to yield consistent profits in an efficient market.

The Weak Form of the Efficient Market Hypothesis Denies the Use