Efficient Market Hypothesis MBA

I am MBA I was having one project to make on Efficient Market Hypothesis please can you define it properly what is Efficient Market Hypothesis

An efficient market is one in which securities prices reflect all available information. This means that every security traded in the market is correctly valued given the available information.

Assumptions in EFFICIENT MARKET HYPOTHESIS
For the capital market efficiency theory to operate, the following
Assumptions are made

1. Information is free and quick to flow.

2. All investors have the same access to information.

3. Transaction costs, taxes and any bottlenecks are not there
And not hampering the free forces of market.

4. Investors are rational and behave in a cost effective
Competitive manner for optimization of returns

5. Every investor has access to lending and borrowing at the
Same rate.

6. Market prices are not sticky and absorb the market information quickly and the market responds to new technology, new trends, changes in tastes, habits of consumers etc., efficiently

EFFICIENT MARKET HYPOTHESIS

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Answered By StudyChaCha Member