Impending changes in social security as well as in corporate and government policies are making individuals more responsible for their retirement savings. As a result, knowledge of investing concepts and financial markets is more important than ever before. The efficient markets hypothesis, the dominant financial markets theory, is described and analyzed. In doing so assumptions are questioned and the three forms of market efficiency are evaluated in quantitative and qualitative fashion to determine whether the efficient markets hypothesis is an accurate view of financial markets. This paper concludes that the efficient markets hypothesis does not accurately describe U.S. stock market activity.
Major Themes in Economics
©2005 by Major Themes in Economics
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"The Efficient Markets Hypothesis Dethroned,"
Major Themes in Economics, 7, 3-30.
Available at: https://scholarworks.uni.edu/mtie/vol7/iss1/3