This paper discusses and summarizes the efficient market hypotheses initially proposed by Fama (1970). According to the efficient market theory, the market is said to be efficient if 'security prices reflect all available information'. Fama (1970) contends that there are three types of market efficiency, namely weak form market efficiency, semi-strong form market efficiency, and strong form market efficiency. Over the last three decades, the efficient market theory has become the center of research interest and has attracted attention, which has contributed to the development of corporate finance theory.
Empirical evidence however appears to support that the American stock market is classified to be the semi-strong form. This means that the information that forms the price in the market has been dominated by historical and public information, although the clear cut is still unwarranted. Other interesting aspect of the efficient market hypothesis is the strong evident of anomaly in the market, which appear to confront the efficient market hypothesis. There are at least four types of market anomalies that have been identified, namely firm anomalies, seasonal anomalies, event anomalies, and accounting anomalies
