According to the weak form of the EMH,
A)successive price changes are biased.
B)successive price changes are dependent.
C)specified trading rules can prove to be extremely useful in generating excess returns.
D)successive price changes are independent.

Question

Quizplus · Accepted Answer

The weak form of the EMH states that all past prices and trading volume are reflected in today's stock price. This means that successive price changes are independent, and there is no way to predict future price movements based on past price movements. Choice A is incorrect because if successive price changes were biased, then there would be a way to predict future price movements, which contradicts the EMH. Choice B is also incorrect because the EMH assumes that successive price changes are independent. Choice C is incorrect because the EMH suggests that there are no trading rules that can consistently generate excess returns.

According to the Weak Form of the EMH