Weak form efficiency: Difference between revisions
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One form of the Efficient Market Hypothesis (EMH). | One form of the Efficient Market Hypothesis (EMH). | ||
The EMH is the general hypothesis that markets operate efficiently. In other words that assets are fairly priced by the market mechanism to incorporate available information. | The EMH is the general hypothesis that markets operate efficiently. In other words that assets are fairly priced by the market mechanism to incorporate available information. | ||
There are three forms of potential efficiency: the weak form, the semi-strong form and the strong form. The weak form states that past prices are no guide to future prices, so charting techniques cannot be used to make excess returns. | There are three forms of potential efficiency: the weak form, the semi-strong form and the strong form. | ||
The weak form states that past prices are no guide to future prices, so charting techniques cannot be used to make excess returns. | |||
== See also == | == See also == | ||
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* [[Semi-strong market efficiency]] | * [[Semi-strong market efficiency]] | ||
* [[Strong form efficiency]] | * [[Strong form efficiency]] | ||
Revision as of 09:49, 14 August 2013
One form of the Efficient Market Hypothesis (EMH).
The EMH is the general hypothesis that markets operate efficiently. In other words that assets are fairly priced by the market mechanism to incorporate available information.
There are three forms of potential efficiency: the weak form, the semi-strong form and the strong form.
The weak form states that past prices are no guide to future prices, so charting techniques cannot be used to make excess returns.
