can you check my answer?
Q: Tests of market efficiency are often referred to as joint tests of two hypotheses - the hypothesis that
the market is efficient and an expected returns model. Explain. Is it ever possible to test market
efficiency alone? (i.e. without jointly testing an asset pricing model)
Ans: without the expected return model no way we can judge the market efficiency. Suppose if we don't have the model such as CAPM then whatever market offer is the right and indirectly we can assume that market can not be inefficient.
Feb 04 2013 10:29 AM