what are the empirical evidence that supports or refutes the Efficient Market Hypothesis? need details thanks

what are the empirical evidence that supports or refutes the Efficient Market Hypothesis?

need details thanks

Expert Solution

Answer: The efficient market Hypothesis takes in to account that the price of a security available in the market reflects all relevant information and it is impossible to beat the market on a sustainable basis.

Best evidence to refute this hypothesis is the evidence of market bubbles and crashes. If the assumptions of the hypothesis were correct, Housing bubble and stock market crash of the 2008 wouldn't have happened.

The same can be said for the tech bubble that happened in the 1990s, when many tech companies were trading at very high valuations before crashing.It means all the information was not utilized efficiently by the market or were not available for general public at large

Behavioral aspects where people biases also comes in to effect in taking decisions have also been not taken in to consideration in this hypothesis.

In support of this Hypothesis, It has been observed in the market in many researches that only few people and only for short period of time have been able to outperform the market. Its like it is almost impossible to beat the market on a regular basis as said by the Efficient market hypothesis.

jeff jeffy answered 9 months ago

empirical evidence supports the notion that U.S. stock markets are generally____form efficient. a. weak b. semi-string...

empirical evidence supports the notion that U.S. stock markets are generally____form efficient. a. weak b. semi-string c. strong d. the studies have shown mixed results.

Navigate to the threaded discussion and respond to the following prompts: What empirical evidence supports the...

Navigate to the threaded discussion and respond to the following prompts: What empirical evidence supports the theoretical approach of the agency in which you are doing your practicum? What human rights does your agency commit to, and what social justice issues does it address? What client groups might feel positively or negatively toward your agency and why? How does the agency determine whether it is effective?

What is the efficient market hypothesis?

Efficient Market Hypothesis. Semi-strong: evidence for and against (anomalies etc.)

Select from the literature a couple of leading papers on empirical efficient market hypothesis testing (at...

Select from the literature a couple of leading papers on empirical efficient market hypothesis testing (at least one from the US stock market, and at least one from a foreign stock market - possibly from an emerging economy) and discus them thoroughly, while addressing the issue of market maturity and regulations affecting information efficiency and technical efficient of the stock market in question. You discussion should include the following parts: - importance of the study, - implications of the paper,...

Select from the literature a couple of leading papers on empirical efficient market hypothesis testing (at...

Select from the literature a couple of leading papers on empirical efficient market hypothesis testing (at least one from the US stock market, and at least one from a foreign stock market - possibly from an emerging economy) and discus them thoroughly, while addressing the issue of market maturity and regulations affecting information efficiency and technical efficient of the stock market in question. You discussion should include the following parts: - importance of the study, - implications of the paper,...

Discuss the concept of Efficient Market Hypothesis and major implications of the Efficient Market Hypothesis. After...

Discuss the concept of Efficient Market Hypothesis and major implications of the Efficient Market Hypothesis. After that, please provide a comprehensive review on evidence in support of the Efficient Market Hypothesis and evidence against the efficient market hypothesis (comprehensive means that you need to give a very clear description of each evidence).

3. Which of the following information would provide evidence against the efficient market hypothesis based on...

3. Which of the following information would provide evidence against the efficient market hypothesis based on public information? Circle all that apply (no explanation necessary). i. Mutual fund managers do not on average make superior returns. ii. You can make superior returns by buying stocks after the announcement of an abnormal rise in dividends iii. High Price/Earnings stocks tend to have negative abnormal returns. iv. Stock prices in companies rise on average when it is announced that they are the...

"Efficient Market Hypothesis (EMH)" Please respond to the following: The book discusses the Efficient Market Hypothesis...

"Efficient Market Hypothesis (EMH)" Please respond to the following: The book discusses the Efficient Market Hypothesis (EMH) and its three forms. The EMH has a lot to do with information and stock prices. How does information get into prices? How do we know if prices reflect all available information? What are abnormal returns? What does the EMH have to say about abnormal returns? Please provide one citation/reference for your initial posting that is not your textbook. Please do not use...

In your own words, what is the efficient market hypothesis?

Question

what are the empirical evidence that supports or refutes the Efficient Market Hypothesis? need details thanks

Solutions

Expert Solution

Related Solutions

empirical evidence supports the notion that U.S. stock markets are generally____form efficient. a. weak b. semi-string...

Navigate to the threaded discussion and respond to the following prompts: What empirical evidence supports the...

What is the efficient market hypothesis?

Efficient Market Hypothesis. Semi-strong: evidence for and against (anomalies etc.)

Select from the literature a couple of leading papers on empirical efficient market hypothesis testing (at...

Select from the literature a couple of leading papers on empirical efficient market hypothesis testing (at...

Discuss the concept of Efficient Market Hypothesis and major implications of the Efficient Market Hypothesis. After...

3. Which of the following information would provide evidence against the efficient market hypothesis based on...

"Efficient Market Hypothesis (EMH)" Please respond to the following: The book discusses the Efficient Market Hypothesis...

In your own words, what is the efficient market hypothesis?