A weak-form market assumes security prices reflect

Question

Quizplus · Accepted Answer

A weak-form market assumes that security prices reflect information about previous prices. This means that technical analysis (which uses past price patterns to predict future prices) will not work in a weak-form market. However, fundamental analysis (which considers public and private information about a company's financial health, management, industry trends, etc.) may still be useful. Weak-form market efficiency does not assume that all information (public or private) is fully reflected in security prices, nor does it assume that prices are entirely random, nor does it assume that information about future dividends is reflected in prices.

A Weak-Form Market Assumes Security Prices Reflect