Weak Form Efficiency

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DEFINITION of 'Weak Form Efficiency'

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Efficient Market Hypothesis - EMH

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  2. Fundamental Analysis

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  3. Technical Analysis

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  4. Random Walk Theory

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  5. Strong Form Efficiency

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  6. Semi-Strong Form Efficiency

    A class of EMH (Efficient Market Hypothesis) that implies all ...
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