10.5 Weak-Form Market Efficiency The assertion is that it is impossible to produce consistently superior returns with a trading rule based on the past history of stock prices. In other words technical analysis does not work A Markov process for stock prices is clearly consistent with weak-form market efficlency Options, Futures, and Other Derivatives, 4th edition@ 2000 by John C. Hull Tang Yincai, C 2003, Shanghai Normal UniversityOptions, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, © 2003, Shanghai Normal University 10.5 Weak-Form Market Efficiency • The assertion is that it is impossible to produce consistently superior returns with a trading rule based on the past history of stock prices. In other words technical analysis does not work. • A Markov process for stock prices is clearly consistent with weak-form market efficiency