Stock Market Efficiency in India
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چکیده
In the empirical literature on capital market efficiency, the hypothesis that futures price is an unbiased predictor of the future spot price has been one of the most controversial topics among the researchers, analysts and academicians. The study of the efficiency of the futures market is significant in an emerging market like India as futures market serves the most important functions of competitive price discovery, management of risk, facilitating financing, and promotion of efficient resource allocation. Thus, this chapter is an attempt to test the long-term efficiency of futures market in India. The application of unit root and Cointegration tests provide the evidence of the futures market efficiency in India. Efficient price discovery in the futures market implies that traders can take significant hedging positions to minimize the risk exposure in the spot market.
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