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Which of the following phenomena would be either consistent with or a violation of the efficient...

Which of the following phenomena would be either consistent with or a violation of the efficient market hypothesis? Explain briefly

a. Stocks that perform well in one week perform well in the following week.

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Answer #1

ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

As per, Efficient market hypothesis:

The security prices already reflect all the available information.

The efficient market hypothesis says that past price movement, earnings report and volume traded doesn't affect stocks Current price and can't be used to predict the stocks future directions.

In simple words, past performance doesn't guarantee the future performance of the stock price moment. The stock price follows the Brownian motion. That is stock price moment is random that's why it's also called as random walk theory.

A.as per EMH, Stock that performs well in one week, doesn't mean it will also perform good in next week.

It is:
Violation: Because past performance doesn't guarantee the future performance. The stock price follows a Brownian motion. That is stock price moment is random.

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