Efficient Market Hypothesis during COVID-19 Pandemic

Abstract

The impact of the COVID-19 pandemic on the efficient market hypothesis, a financial concept used to monitor the stock market. The efficient market hypothesis states that the market for securities is efficient as it reflects all the available information about individual stocks and the holistic market view. The paper assesses the impact of COVID-19 on the U.S. stock market and draws conclusions about the availability of information to stakeholders in the capital market and its effect on their returns and buying potential. The literature review includes studies that assess the efficient market hypothesis in general, specific to COVID-19, and in reference to financial crises. The objective is to contribute to the existing research by assessing capital markets and analyzing the efficient market hypothesis during a crisis, as investors tend to raise their profits by managing their portfolios to hedge funds and risks.