Explanations for anomalies in semi strong form of efficient market hypothesis

Abstract

The tradition notion of efficient market described in the academic literature is quite strong and probably is unrealistic because of following factors: short selling, short covering, fresh buying and profit booking. After all, science is just a human idea about phenomena which can change over time. In real markets, traders can cause markets to be inefficient. According to verifiability newlinetheory of meaning, most of statements are meaningless such as prices reflect earning .in order to make a statement meaningful that statements have to be tested with all ideas related to it. Researcher is testing EMH under various conditions to make meaningful. In this study, researcher is testing so called semi strong under market condition and firm size which is based upon market capitalization. National stock exchange provides classification of companies based newlineupon market capitalization. This is an event study to study stock return to earning newlineannouncements in recession and post recession periods. In other words, testing so called semi strong under market conditions and firm size of market capitalization such as large cap, mid cap and small cap. Researcher uses AARs, CAARS and T-test to study the impact of earning announcements on stock returns. Result of this study shows its onerous to accept semi strong so Fama received the Nobel prize in economics for what? newline