What does weak form efficiency imply?
A)Portfolio diversification is ineffective as all prices are interrelated.
B)Past price movement is unrelated to the movement of future prices.
C)Abnormal returns will disappear within a trading day.
D)Price patterns that existed in the past will reappear in the future.
E)A stock with a highly positive serial correlation in the past will maintain that correlation in the future.

Question

Quizplus · Accepted Answer

Weak form efficiency implies that past price movement is unrelated to the movement of future prices. This means that technical analysis, which relies on historical price trends to predict future prices, is unlikely to be successful in weakly efficient markets. However, fundamental analysis, which evaluates a company's financial and economic factors to determine its true value, may still be useful.

What Does Weak Form Efficiency Imply