EFFICIENT MARKET HYPOTHESIS

In general the hypothesis states that all relevant information is fully and immediately reflected in a security's market price thereby assuming that an investor will obtain an equilibrium rate of return . In other words, an investor should not expect to earn an abnormal return (above the market return) through either technical analysis or fundamental analysis . Three forms of efficient market hypothesis exist: weak form ( stock prices reflect all information of past prices), semi-strong form (stock prices reflect all publicly available information) and strong form (stock prices reflect all relevant information including insider information).