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Abstract
One of the most important and the most controversial theories in finance is the "efficient market hypothesis" (EMH) of Fama (1970). The main premise of the EMHis that random walk is the governing force of the behaviour of the markets. This in turn rules out any benefit from technical analysis. However, recent studies by Lo (2004) suggest that market efficiency is not a static concept rather it is dynamic and consequently markets moves from inefficiency to efficiency gradually. Besides, a lot of theoretical and empirical work on behavioural finance has substantiated that the assumptions on which EMH is based cannot be held in the real world, hence questioning the validity of EMH.