Weak- Form Efficiency in the German Stock Market
The implications of the efficient market hypothesis are important in assessing public policy issues. This paper attempts to examine the weak-form efficiency of the DAX stock market. Five randomly chosen companies and different sub samples are used to confirm the results. The results show that the DAX stock market follows a random walk and supports the weak-form efficiency of efficient market hypothesis (EMH). However, in some models, the strict rational expectations (RE)/EMH element of ‘unpredictability’ is rejected, but not necessarily the view of EMH which emphasizes the impossibility of making supernormal profits..
Volume (Year): 15 (2010)
Issue (Month): 3 (fall)
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"Stock Market Prices do not Follow Random Walks: Evidence from a Simple Specification Test,"
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