Efficient Markets Hypothesis

ArXiv ID: ssrn-991509 “View on arXiv”

Authors: Unknown

Abstract

The efficient markets hypothesis (EMH) maintains that market prices fully reflect all available information. Developed independently by Paul A. Samuelson and Eu

Keywords: Efficient Markets Hypothesis (EMH), Market Prices, Information Efficiency, Asset Pricing, Equities

Complexity vs Empirical Score

• Math Complexity: 2.0/10
• Empirical Rigor: 3.0/10
• Quadrant: Philosophers
• Why: The paper is a theoretical review of the Efficient Markets Hypothesis with only basic statistical tests and no backtesting or code, focusing on conceptual foundations rather than mathematical derivation or empirical implementation.

  flowchart TD
    A["Research Goal: Test if asset prices fully reflect all available information."] --> B{"Methodology: Event Study Analysis"}
    B --> C["Data/Inputs: Historical price data and public news announcements for equities."]
    C --> D["Computational Process: Calculate abnormal returns and analyze post-announcement price drift."]
    D --> E{"Key Findings/Outcomes"}
    E --> F["Prices adjust rapidly to new information."]
    E --> G["Predicting future price movements using past data is difficult."]
    E --> H["Supports the Efficient Markets Hypothesis (EMH)."]