Efficient Market Hypothesis and Financial Managers

This assignment delves into the concept of the efficient market hypothesis (EMH), which posits that markets are informational efficient and that investors cannot anticipate market information or patterns. The EMH is discussed in relation to financial managers' roles, and how they can guide investors based on current performance. Additionally, the analysis touches upon the competition among price-sensitive and profit-maximizing investors, as well as the random walk of stock prices and the unpredictability of news. A critical review of the literature on EMH is also presented.