Final answer:
Weak-form efficiency suggests that past stock returns are not indicative of future returns, as stock prices are believed to follow a random walk with a trend, making market prediction based on past data generally unsuccessful.
Step-by-step explanation:
Weak-form efficiency implies that past stock returns do not help to predict future returns. This concept is based on the hypothesis that stock prices follow a pattern similar to what mathematicians refer to as a "random walk with a trend." These principles suggest that on any given day, stock prices are just as likely to rise as to fall, with the trend part hinting at an overall gradual increase over time.
Despite some financial advisors being able to outperform the market average in certain years, the reality is that trying to predict which stocks will be winners based on past performance is mostly unsuccessful. Most financial investors and mutual funds do not consistently outguess the market, and attempting to do so is not a reliable way to become wealthy. In essence, past returns are not major inputs for forming successful trading strategies according to weak-form efficiency.
Therefore, the correct answer is that weak-form efficiency implies past stock returns do not help to predict future returns.