- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 3. Market Efficiency
- Subject 2. Forms of Market Efficiency
CFA Practice Question
The weak form of the efficient market hypothesis implies that ______
II. past price changes cannot be used to predict future price changes.
III. technical analysis is useless.
I. only major market events can be predicted.
II. past price changes cannot be used to predict future price changes.
III. technical analysis is useless.
Correct Answer: II and III
Technical analysts assume the markets are weak-form INEFFICIENT.
User Contributed Comments 7
User | Comment |
---|---|
ljamieson | technical analysis is useless |
saltnvinegar | What about the other two forms??? |
kutta2102 | Results are mixed, I think. But semi-strong form market efficiency implies that Fundamental analysis is useless. |
janglejuic | technical analysis is not useless because this hypothesis is usually not true |
khalifa92 | technical analysis is based on historical data thus its useless in all forms efficient markets. |
ibrahim18 | Very funny. Technical analysis is useless. That is quite harsh. |
MathLoser | Fooled by randomness |