The well-known efficient market hypothesis is published by Eugene Fama in the 20^th century. Even though it has many useful applications up to now, this theory is suspected for causing the global financial crisis.

According to the efficient market hypothesis, efficient market is the place where the price of the stock will quickly adjust when new information appears therefore a current price of any securities reflect all information relating to it in the market.

Consequently, no one can earn profits through old information or the fluctuations of price in the past. Thus investors cannot outsmart the market. The concept of efficiency is used to imply the quick absorption of information, not the resources to create maximum output as in other fields of economics. Information is also understood that the news might affect the price and unpredictable.

The majority of previous studies on efficient markets is based on “random walk hypothesis”, it refers to the random change in stock prices. Those academic research were full of empirical analysis, which did not follow a theory. In 1970, Fama tried to formalize and streamline hypothesis according to the empirical evidences at that time. Fama who presented the theory of efficient markets model in terms of a fair game, confirmed that investors may believe that the current price of a stock reflects all available information about securities, and profit expectations based on the price and its risks. In his initial report, Fama separated efficient market hypothesis and its testing into three smaller hypotheses based on the information including: Weak-form efficiency, Semi-strong-form efficiency, Strong-form efficiency.