Testing the Weak Form Efficient Market Hypothesis: An Interpretive Study of Market Efficiency Via Literary Logic and Evidence

The Efficient Market Hypothesis (EMH) is among conventional finance's most hotly contested topics. EMH theory was first put forth in 1965 by Eugene Fama; it holds that no investor can make excess profit without engaging in high-risk assets since the stock prices rapidly reflect all the information instantly. The idea of EMH has been challenged by many studies since it is not only the rationality of investors on which investors founded the judgements, but also other elements like individual and personal opinions, behaviour, and heuristics that affect their decisions. The core concept of EMH has been consistently disproved due to market anomalies, like bubbles, crashes, momentum, and calendar effects. This paper aims to investigate the validity of a weak form of efficient market hypothesis in the modern environment by extensively analysing empirical findings from several research projects. By examining foundational works supporting and contradicting the theory, this study aims to investigate the paradox: if markets are efficient, why do irrational events like bubbles and crashes exist? It is implied from our results that although Weak Form EMH is a good theoretical framework, it does not take into account behavioural biases, constraints to arbitrage, or changing market dynamics in the current situation.