Define and discuss the weak-form EMH (efficient-market hypothesis). Describe the two sets of tests used to examine the weak-form EMH.

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The weak-form EMH is the belief based on the assumption that actual stock prices adequately reflect security market information (price history, return rates, trading volume). The approach suggests that historical security market data is independent of the future rates of return.

Statistical tests of independence, including the autocorrelation and the runs test, may be performed to verify the independence of variables (security returns) over time. Additionally, the tests of trading rules can be used to compare the risk-return results from the simulations of trading rules to the outcomes of basic buy-and-hold policies.

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Academic.Tips. (2023) 'Define and discuss the weak-form EMH (efficient-market hypothesis). Describe the two sets of tests used to examine the weak-form EMH'. 10 March.

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Academic.Tips. (2023, March 10). Define and discuss the weak-form EMH (efficient-market hypothesis). Describe the two sets of tests used to examine the weak-form EMH. https://academic.tips/question/define-and-discuss-the-weak-form-emh-efficient-market-hypothesis-describe-the-two-sets-of-tests-used-to-examine-the-weak-form-emh/

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Academic.Tips. 2023. "Define and discuss the weak-form EMH (efficient-market hypothesis). Describe the two sets of tests used to examine the weak-form EMH." March 10, 2023. https://academic.tips/question/define-and-discuss-the-weak-form-emh-efficient-market-hypothesis-describe-the-two-sets-of-tests-used-to-examine-the-weak-form-emh/.

1. Academic.Tips. "Define and discuss the weak-form EMH (efficient-market hypothesis). Describe the two sets of tests used to examine the weak-form EMH." March 10, 2023. https://academic.tips/question/define-and-discuss-the-weak-form-emh-efficient-market-hypothesis-describe-the-two-sets-of-tests-used-to-examine-the-weak-form-emh/.

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Academic.Tips. "Define and discuss the weak-form EMH (efficient-market hypothesis). Describe the two sets of tests used to examine the weak-form EMH." March 10, 2023. https://academic.tips/question/define-and-discuss-the-weak-form-emh-efficient-market-hypothesis-describe-the-two-sets-of-tests-used-to-examine-the-weak-form-emh/.

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