Question: The efficient market hypothesis is based on the assumptions that prices of any securities in financial markets fully reflect all available information and these prices

The efficient market hypothesis is based on the assumptions that prices of any securities in financial markets fully reflect all available information and these prices adjust rapidly to the arrival of new information. This hypothesis has an effect both on companies and investors (Duric,2006). Random walk theory suggests that changes in stock prices have the same distribution and are independent each other. So it is assumed that past movements or trends of any stocks can not used to predict the its future prices. Market efficiency and the random walk hypothesis have been widely discussed in financial literature. Do you believe the market efficiency and Random Walk theory in the financial markets? Why or Why not? Explain shortly.

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