If the weak form of efficient markets holds, then:
A)technical analysis is useless.
B)stock prices reflect all information contained in past prices.
C)stock prices follow a random walk.
D)All of the above.
E)None of the above.

Question

Quizplus · Accepted Answer

If the weak form of efficient markets holds, then technical analysis is useless because all historical price information is already reflected in current prices. In addition, stock prices follow a random walk because they are constantly adjusting to new information and therefore cannot be predicted consistently. Therefore, stock prices reflect all information contained in past prices, and all of the above choices are true.

If the Weak Form of Efficient Markets Holds, Then