Weak- Form Efficiency in the German Stock Market

The implications of the efficient market hypothesis are important inassessing public policy issues. This paper attempts to examine theweak-form efficiency of the DAX stock market. Five randomly chosencompanies and different sub samples are used to confirm the results. Theresults show that the DAX stock market follows a random walk andsupports the weak-form efficiency of efficient market hypothesis(EMH). However, in some models, the strict rational expectations(RE)/EMH element of unpredictability is rejected, but not necessarilythe view of EMH which emphasizes the impossibility of makingsupernormal profits