Introduction

Gourishankar S. Hiremath ()
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Gourishankar S. Hiremath: Department of Humanities and Social Science, IIT Kharagpur

Chapter Chapter 1 in Indian Stock Market, 2014, pp 1-17 from Springer

Abstract: Abstract Theory of efficient market is one of most debated yet controversial theory of Neoclassical School of Finance. The efficient market hypothesis states that in an efficient market, current prices instantly and correctly reflects all the available and relevant information and such market does not provide consistent abnormal returns. Despite a voluminous research, there is no consensus among economists whether financial markets are efficient. This chapter briefly provides theoretical foundations and empirical perspectives of theory of efficient market. Further, the financial sector reforms and changes in market microstructure and trading practices in India, emergence of Indian stock market in recent past, motivation, and need to relook the issue of efficient market in changed environment are explained. Lastly, present chapter presents the issues such as episodic nonlinear dependence, structural breaks and long memory in stock returns addressed in the present volume, nature of data, and scope of the study.

Keywords: Efficient market hypothesis; Random walk; Identical and independent distribution; Emerging market; Market microstructure; Financial sector reforms; Nonlinear dependence; Long memory; Mean reversion; NSE; BSE (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-81-322-1590-5_1

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DOI: 10.1007/978-81-322-1590-5_1

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