
Chapter 3
The Theoretical and Empirical
Perspectives of Efficient Stock Market
3.1 Introduction
Structurally, the stock market consists of the stock exchanges, listed firms and
shareholders; its function is to facilitate share trading. Intrinsically, the stock
market creates links between participants in the economy. It provides channels to
connect consumers and producers, savers and borrowers, managers and owners,
sellers and buyers. Through these channels, the stock market plays a critical role in
the capital resource allocation of a modem economy; a modem economy cannot
function well in the absence ...