Weak Form Efficiency

What is 'Weak Form Efficiency'

Weak form efficiency is one of the different degrees of efficient market hypothesis (EMH) that claims all past prices of a stock are reflected in today's stock price. Therefore, technical analysis cannot be used to predict and beat a market.

BREAKING DOWN 'Weak Form Efficiency'

Theoretical in nature, weak form efficiency advocates assert that fundamental analysis can be used to identify stocks that are undervalued and overvalued. Therefore, keen investors looking for profitable companies can earn profits by researching financial statements.

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RELATED FAQS
  1. What does the efficient market hypothesis assume about fair value?

    Found out what the efficient market hypothesis says about the fair value of securities, and learn why technical and fundamental ... Read Answer >>
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  3. Why does the efficient market hypothesis state that technical analysis is bunk?

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  4. What does the Efficient Market Hypothesis have to say about fundamental analysis?

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