Weak Form Efficiency


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.

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.

  1. Strong Form Efficiency

    The strongest version of market efficiency. It states all information ...
  2. Semi-Strong Form Efficiency

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

    A market where prices are manipulated and impacted by erroneous ...
  4. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  5. Random Walk Theory

    The theory that stock price changes have the same distribution ...
  6. Fundamental Analysis

    A method of evaluating a security that entails attempting to ...
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