The EMH states that stocks are traded at its fair values. This means there is no arbitrage strategy in efficient markets. However, if the market is no arbitrage, can we conclude the market is ...
Tests of market efficiency are the joint tests of (1)the market is efficient and (2) expected return model. Please help me (a) explain this and (b) is it possible to test market efficiency with ...
What is a martingale and how it compares with a random walk in the context of the Efficient Market Hypothesis?
What is the difference between market equilibrium and market efficiency? equilibrium implies efficiency?
The market efficiency hypothesis means securities are traded at their fair price. If the market is at the equilibrium, does it mean the market is efficiency? If equilibrium cannot implies ...
What is the difference between RWH and EMH? In efficient market, the price will be fully reflected by available information. If there is no news, the price would be unchanged. If there is a news, ...
I have encountered a rather elegant argument about the limitations of empirically testing for market efficiency, involving the central point that we do not know whether a result is due to the "true ...
In http://www.principlesofforecasting.com/files/pdf/Granger-stockmarket.pdf Granger makes survey of some arguments. In section I there are two hypothesis H01, and H02. H01: Stock prices are a ...
I came to the conclusion that in literature Markowitz' Portfolio Theory is believed to be compliant with the Efficient Market Hypothesis. The weakest form states that the current price fully ...
Quantitative finance formular are mostly based on martingales, Poisson jump, GBM, CEV, etc.. The logic behind it is that martingale means the future could not be predicted, or, EMH (Efficient-market ...