The observation that stocks price behaviour is that of a "random walk" is related to the __________ version of the efficient market hypothesis.
A) semi-weak form
B) semi-strong form
C) event-form
D) weak-form
E) Malkiel theorem

Question

Quizplus · Accepted Answer

The weak-form efficient market hypothesis suggests that stock prices already reflect all past market trading information, including historical prices and trading volume, and that investors cannot consistently achieve returns greater than that of the overall market through technical analysis or other means of analyzing historical stock prices. The concept of a "random walk" in stock prices suggests that future price movements cannot be predicted based on past price movements, supporting the idea of a weak-form efficient market.

The Observation That Stocks Price Behaviour Is That of a "Random