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sir i watched lectures and also studied the study notes but i have doubt in weak form efficiency
my doubt is:
DO weak form form efficiency means that the market is slow to react to information?
and if not then why it does not include all publicly available information?
also efficiency of market is dependent on the level of information incorporated in share price,right?
and a definition of perfect market is also given, which is the seed of reacting to available information, if all three market efficiency forms assumes a perfect market, the why weak form efficiency market not include all publicly available information?I have tried to emphasise the points in the use of capitals
In weak form efficiency, share prices are believed to already incorporate all PAST price movements and historical information.
Weak form efficiency, although it assumes a perfect market, it DOES NOT INCLUDE all publicly available information because it ONLY considers past price movements and historical information, and does not take into account new information that has not yet been made publicly available.
Therefore, weak form efficiency does not include all publicly available information, despite assuming a perfect market.
so sir is weak form efficiency slow in reacting to information? that’s my other doubt, but since it assumes a perfect market, it cannot be slow in reacting to information, then why it cannot incorporate information?
in other words what i want to ask is can we say that weak form efficiency is slowest in terms of reacting to publicly available information?
Weak form efficiency is not necessarily slow in reacting to information. In a weak form efficient market, share prices are believed to already incorporate all past information, including historical price movements.
Therefore, weak form efficiency does not imply a slow reaction to information, but rather that past information is already incorporated into prices.
But they are still slow in reacting as compared to semi strong efficient market
In other words what i tried to think was that as efficient market are assumed perfect,they will be quick in incorpoating information, but comparatively weak form efficient market will be slower than semi strong
In an efficient market, it is assumed that prices quickly incorporate all available information.
However, in comparison, a weak form efficient market is expected to be slower in incorporating new information compared to a semi-strong form efficient market. This is because weak form efficiency is based on the idea that share prices already reflect past price movements and historical information, while semi-strong form efficiency takes into account publicly available information in addition to past prices.
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