Market Anomalies

Research Journal of Finance and Accounting
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 2, No 9/10, 2011

www.iiste.org

Market Efficiency, Market Anomalies, Causes, Evidences, and Some Behavioral Aspects of Market Anomalies
Madiha Latif* Shanza Arshad,

Mariam Fatima,

Samia Farooq

Institute of Management Sciences Bahauddin Zakaria University, Multan, Pakistan
Email: [e-mail]
Abstract
Market efficiency hypothesis suggests that markets are rational and their prices fully reflect all available information. Due to the timely actions of investors prices of stocks quickly adjust to the new information, and reflect all the available information. So no investor can beat the market by generating abnormal returns.
But it is found in many stock exchanges of the world that these markets are not following the rules of EMH.
The functioning of these stock markets deviate from the rules of EMH. These deviations are called anomalies. Anomalies could occur once and disappear, or could occur repeatedly. This literature survey is of its own type that discusses the occurrence of different type of calendar anomalies, technical anomalies and fundamental anomalies with their evidences in different stock markets around the world. The paper also discusses the opinion of different researchers about the possible causes of anomalies, how anomalies should be dealt, and what ere the behavioral aspects of anomalies. This issue is still a grey area for research.
Key Words: EMH, CAPM, Calender Anomalies, Technical Anomalies, Fundamental Anomalies.
1. Introduction:
According to efficient market hypothesis markets are rational and prices of stocks fully reflect all available information. The securities prices quickly adjust to new information as readily that information is available.
But according to behavioral finance this kind of efficient market cannot explain the observed anomalies in
Market anomalies are the unusual occurrence or abnormality

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