Efficiency of Stock Market: A Study of Stock Price Responses to Earnings Announcements

Iqbal, T.H. and Mallikarjunappa, T. (2011). Efficiency of Stock Market: A Study of Stock Price Responses to Earnings Announcements, LAP Lambert Academic Publishing Company, Germany.

Posted: 3 Feb 2020

Date Written: November 9, 2011

Abstract

Market efficiency is examined in three forms: weak form, semi-strong form and strong form and each one deals with a different source of information.

1. Weak form efficient market - the prices of securities fully reflect all historical information and no excess returns can be earned by utilising historical share prices.

2. Semi-strong form - securities prices adjust instantaneously to available new information such as earnings announcements, bonus issue, merger and acquisition, etc. so that no excess returns can be earned by trading on that information.

3. Strong form efficient market - securities prices fully reflect all information, including inside or private information.

Keywords: Efficient Market Hypothesis theory (EMH), excess return, Cumulative Average Abnormal Returns, quarterly earnings announcements, Indian stock market, Semi-strong from of EMH, Indian stock market response to earnings information

JEL Classification: G13, G14, G 15, G18, C32, F30

Suggested Citation

Hawaldar, Iqbal Thonse and Mallikarjunappa, T., Efficiency of Stock Market: A Study of Stock Price Responses to Earnings Announcements (November 9, 2011). Iqbal, T.H. and Mallikarjunappa, T. (2011). Efficiency of Stock Market: A Study of Stock Price Responses to Earnings Announcements, LAP Lambert Academic Publishing Company, Germany. . Available at SSRN: https://ssrn.com/abstract=3516787

Iqbal Thonse Hawaldar (Contact Author)

Kingdom University ( email )

Sanad
Bahrain

T. Mallikarjunappa

Mangalore University ( email )

Mangalagangotri
Mangalore - Dakshina Kannada
Mangalagangothri - 574 119, D.K. Karnataka 574199
India

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