An investor discovers that predictions about weather patterns published years in advance and found in the Farmer's Almanac are amazingly accurate. In fact, these predictions enable the investor to predict the health of the farm economy and therefore certain security prices. This finding is a violation of the

Question

Business

Yadiel

4 November, 21:54

An investor discovers that predictions about weather patterns published years in advance and found in the Farmer's Almanac are amazingly accurate. In fact, these predictions enable the investor to predict the health of the farm economy and therefore certain security prices. This finding is a violation of the

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Answers (1)

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Aedan Kemp · Answer 1

D. weak form of the efficient market hypothesis.

Explanation:

Weak form efficiency is also known as the random walk theory. According to this theory, past events do not have any effect on future prices. The individual supporting weak form efficiency advocates that the current value does not have any relationship with past information. In the above case, the investor finds that the past and the present situation is equivalent and therefore this proves to be the violation of the weak form efficiency.