Topic Background: The general implication of stock market efficiency is that mar

Topic Background:
The general implication of stock market efficiency is that markets receive new information
about all aspects that affect stock prices but prices adjust with such speed that investors are
not capable of realizing above‐average trading profits by trading on that information.
Tests of the validity of the EMH have been carried out in most of the stock exchanges all
over the world. A comprehensive review of the literature illustrates that even when one
sort of test (the serial correlation coefficient test, the run test, the variance ratio test, etc.)
rejects the random walk hypothesis, other tests may not. For example, tests may show
monthly prices follow a random walk, but weekly prices or daily prices may not.
Alternatively, the returns on indexes for a very long period may be shown to be
independent whilst the returns on indexes for sub‐period may be dependent. Therefore,
applying a variety of tests to different types of data and comparing the results on the bases
of similar sort of data and test implements will improve the accuracy of the study.
Topics that might be covered in this type of study include tests of the EMH (Weak, Semi
strong or Strong form), stock volatility issues or the implications of behavioral finance.
Example research questions could include:
1. Evaluating market efficiency by testing for the random walks in stock prices
2. Can technical analysts generate abnormal gains?
3. Do actively managed funds outperform the market?

Morningstar has an extensive ranking system for mutual funds, including a screen

Morningstar has an extensive ranking system for mutual funds, including a screening
program that allows you to select funds based on a number of factors. Open the
Morningstar Web site at www.morningstar.com and click on the Mutual Funds link.
Select the Fund Quickrank link in the Performance section. (Free registration is
required to access the site.) You could use the Quickrank screener for several
purposes such as to find a list of large growth stock funds with the highest 1-year and
3-year returns.
For this assignment, you are required to select three of the funds that appear on both
lists of the highest 1-year and 3-year returns. For each fund, you are advised to check
their relevant Morningstar report and look in the Ratings & Risk section to perform the
following tasks
1- Find and explain the funds’ standard deviations.
(10 marks)
2- Find and explain the funds’ Sharpe ratios.
(10 marks)
3- Find and explain the funds’ Treynor ratio.
(10 marks)
4- Find and explain (i) the standard index and (ii) the best-fit index.
(10 marks)
for each 10 marks with 300 words , thanks