Stock Market Efficiency How Does It Reflect on the...

Stock Market Efficiency: How does It Reflect on the Securities Trading Abstract: Stock market efficiency has been the subject matter of research studies for periods well over the past three decades. Several theories have been established about basically how the competition will drive all information into the prices of securities quickly. Centering this idea the concept known as Efficient Market Hypothesis has been evolved which also has been the subject of intense debate among academics and financial professionals. Efficient Market Hypothesis states that at any given time security prices fully reflect all available information. It is stated that if the markets are efficient and current prices fully reflect all information then buying†¦show more content†¦Thus the efficiency of the market is determined purely on the basis of the availability of the information. With this background this paper brings out the determinants of the stock market efficiency and its relative effects on the trading of the securities being undertaken in the market. 7 Chapter 2 Objectives, Scope and Research Methodology of the Dissertation: Having studied the broad outline of the research on the stock market efficiency as outlined in the introduction, this paper proceeds to define the boundaries of this research field namely the Objectives and Scope of this study, Research approach, Research Strategies, Data Collection Methods and dissemination of the data and information to arrive at the conclusions of the research. 2.1 Objectives of the Study: This dissertation paper aims to achieve the following objectives with respect to the chosen topic of the ‘Efficiency of the Stock Market’. The objectives are: †¢ To establish that there exists a concept of the efficiency of the stock market which implies that at any given point of time the prices of securities react to all the market information positively or negatively depending on the nature of the information. †¢ To make a complete report on the above efficient market hypothesis t hat forms the basis for this dissertation. In order to substantiate the claim put forward under the efficient market hypothesis, the study will make a review of allShow MoreRelatedCapital Market Efficiency For Finance Managers1383 Words   |  6 PagesDiscuss briefly the implications of capital market efficiency for finance managers . A description of capital market efficiency - An efficient capital market is one in which stock prices fully reflect available information . The EMH has implications for investors and firms . 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