What defines a weak market efficiency?

Weak market efficiency refers specifically to the idea that current stock prices reflect all past trading information, such as historical prices and volumes. This means that an investor cannot achieve excess returns by analyzing historical price data because this information is already accounted for in the current prices.

In the context of the efficient market hypothesis (EMH), weak market efficiency implies that only historical price information is relevant in predicting future price movements. Therefore, technical analysis, which relies on identifying patterns from past prices, would not lead to consistent outperformance in such a market.

The other options tie into different forms of market efficiency. The incorporation of all public information suggests semi-strong efficiency, while incorporating all information, both public and private, aligns with strong market efficiency. Reliance on historical prices only encapsulates the notion of weak efficiency without incorporating the broader scope of public and private information, which is why this option distinctly defines weak market efficiency.