Question

The weak form of the efficient market hypothesis states: a.    All information is known by all market...

The weak form of the efficient market hypothesis states:

a.    All information is known by all market participants.

b.   All financial markets clear.

c.    Only the corporate bond market clears.

d.   Current stock prices are the best guess for future stock prices.

e.    All public information is known by all market participants.

Homework Answers

Answer #1

In the weak form of the efficient market hypothesis, current prices reflect all historical information due to which the future stock prices cannot be predicted.

Therefore, option d is wrong because a weak form of efficient market hypothesis can not predict future stock prices.

Hence, Option A & E are the right options as all the information is known by all market participants!

PS: The meaning of the sentence of option A & E is same that's why both options are correct.

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