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International Journal of Business, Economics and Law, Vol. 2, Issue 2 (June) ISSN 22891552 2013 A TEST OF THE WEAK FORM EFFICIENCY OF THE ZIMBABWE STOCK EXCHANGE AFTER CURRENCY REFORM Batsirai Winmore.

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The ZSE industrial index was found to be weak form inefficient and the study failed to conclude weak form efficiency for the mining index due to evidence of model dependency.

In many of the markets studied, a significant number of stocks rejected the random walk. Only three markets, Namibia, Kenya and Zimbabwe, were found to be relatively weak form efficient.

The weak form of EMH is the lowest form of efficiency that defines a market as being efficient if current prices fully reflect all information contained in past prices. This form implies that past prices cannot be used as a predictive tool for future stock price movements.

Weak form efficiency, also known as the random walk theory, states that future securities' prices are random and not influenced by past events. Advocates of weak form efficiency believe all current information is reflected in stock prices and past information has no relationship with current market prices.

Tests of market efficiency look at the whether specific investment strategies earn excess returns. Some tests also account for transactions costs and execution feasibility. In every case, a test of market efficiency is a joint test of market efficiency and the efficacy of the model used for expected returns.

Three common types of market efficiency are allocative, operational and informational. However, other kinds of market efficiency are also recognised. Arbitrage involves taking advantage of price similarities of financial instruments between 2 or more markets by trading to generate profits.

Weak form of EMH is tested using the Kolmogorov-Smirnov goodness of fit test, run test and autocorrelation test. The K-S test result concludes that in general the stock price movement does not follow random walk. The results of the runs test reveals that share prices of seven companies do not follow random walk.

The weak form of the EMH assumes that the prices of securities reflect all available public market information but may not reflect new information that is not yet publicly available. It additionally assumes that past information regarding price, volume, and returns is independent of future prices.

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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232