- CFA Exams
- CFA Exam: Level I 2021
- Study Session 19. Portfolio Management (2)
- Reading 56. Technical Analysis
- Subject 1. Definition and Scope
CFA Practice Question
If weak form market efficiency holds, then ______
B. technical analysis works.
C. fundamental analysis does not work.
A. technical analysis does not work.
B. technical analysis works.
C. fundamental analysis does not work.
Correct Answer: A
Tests of weak form market efficiency examine whether it is possible to earn superior returns by examining only past price data.
User Contributed Comments 3
| User | Comment |
|---|---|
| raution | when there is weak form market efficiency then the prices do not adjust quickly giving room for technical analysis. |
| JakeZ | NONONO Weak form efficiency = all the past information is already incorporated into the stock price so there is NO room for technical analysis! |
| fredpat01 | Agreed with Jake; Weak form efficiency claims that past price movement does not affect stock prices. |