Capital Market Efficiency Paper Capital Market Efficiency Paper?purpose

Capital Market Efficiency PaperNameCourseTutor’s NameDateCapital Market Efficiency PaperMarket efficiency may be described as the efficiency with which the prices in the market reflect the available information in the market. The efficiency of a market can therefore by judged by its ability to accurately reflect new information as soon as it is available. Therefore an efficient capital market is a market that is successful in incorporating real time information on the value of securities CITATION Fam70 \l 7177 (Fama, 1970). Organized markets, technology and wide availability of information enhance market efficiency. In efficient capital markets investors are not able to earn abnormal profits because new information is incorporated in the prices of assets.Market efficiency may be categorized into three classes. The first category is the weak form market efficiency in which all the available information is about past prices. In semi-strong form market efficiency, all the available information consists of past prices and public information. In strong- form market efficiency all information including inside information is available. When a market reflects all information in prices, using the available information will result in zero profit. In