Empirical research has most often shown that securities markets fall into the ____ category of market efficiency.

Question

Quizplus · Accepted Answer

Empirical research has consistently shown that securities markets exhibit weak form efficiency, which means that all historical price and volume information is already reflected in the current market price. This suggests that technical analysis, which tries to profit from patterns in past prices and volumes, is unlikely to be successful in the long term. The evidence for semistrong and strong form efficiency has been more mixed, and there is some evidence that expert analysis and insider trading can provide abnormal returns in certain circumstances. However, overall the evidence suggests that markets are largely efficient in processing all publicly available information.

Empirical Research Has Most Often Shown That Securities Markets Fall