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The concept of “efficient market hypothesis” has attracted a lot of debate and controversy in modern...

The concept of “efficient market hypothesis” has attracted a lot of debate and controversy in modern finance. As a student of finance, what critical issues would you say you have learnt about market efficiency using capital market history as your reference point?

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Efficient Market Hypothesis states that stocks are fairly priced and reflects all available information to public.

  • From efficient market hypothesis theory we know that when any new information published , it affects the stock price of the company. It make the stock price value increased or decreased.
  • Using this theory one can say that the market tends to fluctuate every time when some information reflected in the market. For some investor said that it is very difficult to beat market condition to get desirable return.
  • In this regard a few legendary investor reported that capital history also reflects some low cost portfolio are able to generate return in this market randomness.
  • Here psychology of investing or behaviourial finance saves the investor from rationality of investment thinking.
  • And a thourough observation of stock market financial will create return for investor., which enable the fund managers to track the underperform and overperform of stocks.


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