Efficient Market Hypothesis- a Case Study on National Stock Excahnge

Abstract

The EMH means that stocks always trade at their fair value on stock exchanges, and thus, it is impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices. Thus, the crux of the EMH is that it should be impossible to outperform the overall market through expert stock selection or market timing, and that the only way an investor can possibly obtain higher returns is by purchasing riskier investments. This paper investigates whether prices of stocks in National Stock Exchange follow a random walk process.