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An issue that is the subject of intense debate among academics and financial professionals is the Efficient Market Hypothesis. The Efficient Market Hypothesis states that at any given time, security prices fully reflect all available information. The implications of the efficient market hypothesis are truly profound. Most individuals that buy and sell securities do so under the assumption that the securities they are buying are worth more than the price that they are paying, while securities that they are selling are worth less than the selling price. This implies that price changes in an efficient market must be random. If prices always reflect all relevant information, then they will change only when new information arrives. Therefore, price changes cannot be predictable. Price changes in an efficient market must be random. The Efficient Market Hypothesis is classified on three levels according to the degree of efficiency. The three classifications...

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