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If the stock market is at least weak form efficient, then price changes should allow investors...

If the stock market is at least weak form efficient, then price changes

should allow investors to earn abnormal returns

should follow patterns

should go up if the price went up the day before

should be random
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Answer #1

Correct answer is If the stock market is at least weak form efficient, then price changes should be random.

Weak form of market efficiency means the security prices fully reflect all the prices. In this the trend analysis is useless ( prices don't follow patterns) - one cannot predict tomorrow's prices on the basis of previous prices. The successive price changes are random.

So all the other options are incorrect the the stock prices has no memory. The prices are not dependent on previous day's price.

Hope it solves the query!

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