... participants who are analyzing securities; 2) new information arriving in the market in a random way; 3) investors adjusting to new information rapidly--not necessarily correctly, just in an unbiased way; 4) expected returns implicitly include risk. (Rattiner 2002) In order to provide the more practical definition of EMH, Fama (1970) define the information structure and produced three forms of EMH: 1) Weak form efficiency 2) Semi strong form efficiency 3) Strong form efficiency. In Fama's (1991) paper, he revised the definitions for these three forms as 1) Predictability 2) Event Studies 3) Inside information. Now this paper will analyse the EMH critically through its three forms. Weak Form Efficiency: In the weak form efficiency, Fama (1970) claims that the share prices fully reflect all information contained in the past price movement. Also the security returns are independent of each other and there is no correlation between share prices over time. This view is ...

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