Describe the three forms of Efficient Market Hypothesis and in each form, discuss the usefulness of...

Describe the three forms of Efficient Market Hypothesis and in each form, discuss the usefulness of technical analysis and fundamental analysis in portfolio choice.

Expert Solution

The capital market is considered to be efficient in three different forms: weak form of efficiency , semi strong form of efficiency and finally strong form of efficiency ,which are dealing with access and checking with different information related with stocks or securities.

The weak form of the EMH mainly deals with the information's which have the current prices and also included historial information of past prices of securities.

Semi strong form efficiency mainly describe the security current prices which contain both historical price as well as publically available information of company's securities...

Strong form of efficiency mainly the most highest form which deals in current price which included historical and publically & inside or private information also use in this form.

Mainly in security market or capital market having three major thoeries i.e , fundamental analysis, technical analysis and efficient market hypothesis. The security analysis done through mainly these approaches....

The first two one are i,e. Fundamental analysis means which mainly deals with fundamental factors which affect the company,industry as well as economy.

Technical analysis also a relevant one which means the study of past movement and fluctuations of share prices of shares to help for getting stock's movement,trend and patterns in a technical way.
The both approaches very older as well as very reasonable to alll common man for choosing a better portfolio.

Rahul Sunny answered 7 months ago

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