Weak Form Efficiency

A version of the efficient markets theory on how markets work. It holds that the market efficiently deals with most information on a given security and reflects it in the price immediately. Specifically, weak form efficiency states that technical analysis is ineffective and that prices are on a random walk. Investors and academics disagree on how well the model works, but it is less controversial than the semi-strong form of the EMT and the strong form of the EMT.

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References in periodicals archive ?

Daskalakis and Markellos (2008) examined the efficiency of the European market for carbon dioxide emission allowances and found that the behavior of the markets under consideration is not consistent with the weak form efficiency.

Evidence on weak form efficiency and day of the week effect in the Indian stock market".

Testing the weak form of efficient market hypothesis in carbon efficient stock indices along with their benchmark indices in select countries

Testing Weak Form Efficiency for India Stock Markets.

Weak Form of Efficient Market Hypothesis--Evidence from Pakistan

TESTING THE WEAK FORM EFFICIENCY ON THE ROMANIAN CAPITAL MARKET

Romanian capital market: Random walk or weak form of inefficiency?

In emerging markets Wong and Kwong (1984) used the runs test to examine the weak form efficiency in the Hong Kong stock market and concluded that it is inefficient.

Stock market behavior: a fractal analysis of Saudi Stock Exchange

Weak form efficiency exists when security prices reflect all the information contained in the history of past prices and returns.

Efficient market hypothesis: the case of India's equity market

The results of nonlinear unit root tests indicated that only Bulgarian, Czech, Hungarian and Slovakian price series contain unit root, consistent with weak form efficiency.

Testing weak-form efficiency of emerging economies: a critical review of literature/Kritine kylancios ekonomikos mazo rinkos efektyvumo literaturos apzvalga

Numerous studies (Fama, 1965; Alexander, 1961; Fama and Blume, 1966; Granger and Morgenstern, 1970) support the random walk theory in support of weak form efficiency.

Can trading on federal funds rate change announcements produce above normal stock market returns?: A test of market efficiency

If these alphas persist over time and investors can use the information in the past returns of the funds to form strategies that deliver value added performance, this speaks to weak form efficiency.

9 A summary: the evidence on managed portfolio performance and market efficiency

No odds category has a positive return, a result consistent with weak form efficiency.

Racetrack wagering and the "uninformed" bettor: a study of market efficiency

The earlier studies on testing weak form efficiency started in the developed market.

Effect of sub-prime crisis on the efficiency of Indian stock market--an empirical study

Poshakwale (1996) found that the prices on BSE did not follow random walk by studying weak form efficiency and the day of the week effect on the Bombay Stock Exchange and the distribution was not normally distributed.