Ans:
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.