An Empirical Study on Weak Form Efficiency of Indian Stock Market
Keywords:
Efficient market hypothesis, Random walk theory, Weak form, Run test, Auto Correlation TestAbstract
Market efficiency simply means the accuracy and quickness with which price reflect market related information. The present study examines the weak form market efficiency of Indian Stock market. In weak form of market, Current price reflect all the information found in the past price. So the future price of Security can not be predicted by analyzing past share price data. The present paper discuss the concept efficient Market Hypothesis and also literature available on the same. By taking 10 securities listed On NSE, run test and auto correlation test are applied to judge the weak form market efficiency of Indian stock market. From the study it is found that the relationship between past stock price of sample companies and their future stock price is very meager. This shows that price change are random and market is efficient in weak form.
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