Which form of the efficient market hypothesis implies that security prices reflect only information contained in past prices?
A)Weak form
B)Semistrong form
C)Strong form
D)Hard form
E)Past form

Question

Quizplus · Accepted Answer

The weak form of the efficient market hypothesis states that stock prices already reflect all information contained in past prices, which means that technical analysis cannot be used to outperform the market. This form asserts that security prices reflect all historical price and volume data and that future security prices are independent of past security prices. Therefore, it is not possible to use technical analysis to predict future security prices.

Which Form of the Efficient Market Hypothesis Implies That Security