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 either of these ones?

  • $\begingroup$ I would suggest reading Fama's Original 1970 Paper on efficient market. That paper is not that difficult to read but very insightful. $\endgroup$ – zsljulius Oct 12 '15 at 21:45

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