AN EVIDENCE ON FAIR MARKET VALUE USING EFFICIENT  MARKET HYPOTHESIS ON NIFTY IT INDEX

Shreyas G, Student, Dept. of MBA, Dr Ambedkar Institute of Technology,

Bangalore.

Dr. Leela M H, Assistant Professor, Dept of MBA, Dr Ambedkar Institute of Technology, Bangalore.

ABSTRACT

The effectiveness of the stock market draws investors to make investments. Without deals in the stock market, an efficient market means that stock prices are accurate. In other words, a market that is efficient will reflect a share's market price as a fair approximation of its underlying value. Fair market value is derived from stock prices using the Efficient Market Hypothesis. The current study investigates the randomness of the price fluctuations of the ten IT stocks that were chosen and traded on the National Stock Exchange (NSE). The effectiveness of the stocks was assessed using the Runs test, which comprises observed runs, upper and lower limits. For the twelve-month period from June 2021 to May 2022, the closing price data has been gathered. From the returned upper and lower limit and observed runs for five IT stocks, null and alternate hypotheses have been determined. The investigation shows that the chosen IT stocks were under Semi-Strong operating efficiency. Overall, the hypothesis of selected stocks were above Semi- Strong hence null hypothesis is accepted.

KEYWORDS: Efficient Market Hypothesis, National Stock Exchange, Runs Test.