________ means that the price of the security reflects the past price and trading history of the security.

Question

Quizplus · Accepted Answer

Weak-form efficiency refers to the idea that current security prices already reflect all historical trading information, including past prices and trading volumes. This means that technical analysis, which relies on studying past price and volume patterns, cannot be used to consistently generate excess returns. Semistrong-form efficiency and strong-form efficiency refer to even stronger versions of the efficient market hypothesis, in which all publicly available information (including financial statements and insider trading data) is already reflected in security prices. Therefore, answer choices B and C are not the best choices for this question.

________ Means That the Price of the Security Reflects the Past