The form of informational market efficiency that states that current market prices of securities reflect all information contained in past price movements is known as the _____.

Question

Quizplus · Accepted Answer

The description given refers to weak-form efficiency, which suggests that past prices do not provide any useful information for predicting future price movements. Strong-form efficiency would mean that all information, including insider information, is reflected in current prices, which is not suggested by the given description. Semistrong-form efficiency suggests that all publically available information (not just past prices) is reflected in current prices, which is not specifically mentioned in the given description. Economic efficiency and real-time efficiency are not commonly used terms in financial market efficiency literature.

The Form of Informational Market Efficiency That States That Current