- This topic has 3 replies, 2 voices, and was last updated 3 years ago by
.
- Posts
I have read in the notes about the market efficiency hypothesis where
Weak-form efficiency is where share prices reflect all information based on past prices
Semi-strong form efficiency is where share prices reflect all current information (Past & Published) available
Strong-form efficiency where share prices reflect all information (Past & Published & Unpublished) available
In the specimen there is a question#3:
Gurdip plots the historic movements of share prices and uses this analysis to make her investment decisions.Here Gurdip is relying on the historic movements (Past information) about the share prices movement, therefore, it is weak-form efficiency. BUT it states that it is ‘Not at ALL Efficient’ BUT WHY?
Can you please also state the technical & fundamental analysis & where they are relevant to?
Weak form efficiency is when prices react to past information when it reaches the market.
Fundamental analysis looks at how much a company is really worth (looking at the strength of the company, the current effect of the economy on the business etc..)
Technical analysis looks at trends such as the way the share price has changed in the past.
- The topic ‘Market Efficiency’ is closed to new replies.