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Question: the efficient market hypothesis (EMH) suggest that the stock prices already reflect all the available valuable information and it is therefore not possible to beat the market by making abnormal returns. Does this view find support in the empirical literature? ******************************************************************** Introduction The efficient market hypothesis (EMH) was developed by Fama in 1960-70s. Fama (1970) claims that in an efficient capital market, the security prices rationally reflect the available information which is obtained quickly and enables a company's stock prices to adjust rapidly. Therefore the investors are unable to outperform the market on a consistent basis. However lots of the empirical studies also proof that there are anomalies exist in the capital market. This paper aims at discuss the reliability of EMH through analyzing the empirical studies. Definition: Fama (1970) claims that in the efficient capital markets, all the technical and fundamental analysis cannot provide a higher-than-normal rate of return, in other...

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