... p in the period before, plus or minus some random variable. The random walk hypothesis states that the present market price is the best indicator of the future market prices with an error term that is stochastic in nature. Hence the next time period price is anybody's guess. In an efficient market it is not possible to make profit based on the past information hence the prediction of the future price conditional on the past prices on an average should be zero. The more efficient a market is the more random and unpredictable the market returns would be. In the most efficient market the future prices will be totally random and the prices formation can be assumed to be a stochastic process with mean in price change equal to zero. The objective of this project is to investigate whether prices in stock markets follow a weak form efficient process. The presence ...

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