7- Efficient markets framework Flashcards
1
Q
What are the 3 forms of market efficiency?
A
-Weak form
-Semi-strong form
-Strong form
2
Q
Describe weak form efficiency
A
Actual prices fully reflect all info contained in past prices
3
Q
Describe semi-strong form efficiency
A
Actual prices fully reflect all public information, like fundamental analysis of companies / countries
4
Q
Describe strong-form efficiency
A
Actual prices fully reflect all information, including private information
5
Q
What is the main implication of weak form efficiency?
A
Technical analysis is useless- past price action is already reflected in current price
