Efficient Market Hypothesis | CA Final SFM
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Khetan Education Efficient Market Hypothesis File
This video describes the Efficient Market Hypothesis in brief and various tests that can be conducted to test EMH.
As per EMH, markets are informationally very efficient and hence it absorbs all the information available, leaving little scope for investors to earn an abnormal return. The theory has been propounded by Eugene Fama and who segregated the theory into three levels.
1. Weak Form of EMH
2. Semi Strong Form of EMH
3. very Strong Form of EMH
This video explains the four statistical tests available to test the efficiency of the market:-
a. Runs Test
b. Auto Correlation Test
c. Residual Analysis
d. Event Studies
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