Market Efficiency Hypothesis Example for Free
The notion of efficient market can be traced back to Bachelier(1900) in his dissertation. According to his research, the expected return for each investor can be seen as an independent event, and the samples are close to normal distribution. That means, therefore, the expected return for the security is zero and the stock prices are unpredictable. As he stated, “past, present and even discounted future events are reflected in market price, but often show no apparent relation to price changes” […]