In testing whether a market is characterized by weak form eﬃciency:
A)a positive coeﬃcient of serial correlation for a particular share indicates a tendency toward
Reversal.
B)a negative coeﬃcient of serial correlation for a particular equity indicates a tendency
Toward continuation.
C)serial correlation coeﬃcients are consistent with weak form eﬃciency.
D)Both A and C.
E)Both A and B.

Question

Quizplus · Accepted Answer

In weak form efficiency, past price information is already reflected in current prices, so serial correlation coefficients should not show any predictable patterns.

In Testing Whether a Market Is Characterized by Weak Form