ABSTRACT
It is a universal fact that investors want to maximize their invested amount. This can only happen if they know whether there is an arbitrage opportunity in the market. If the stock market is efficient, one cannot generate an abnormal profit. The main objective of the present study was to test the random walk hypotheses of stock returns of the top 10 stock exchanges: NYSE, NASDAQ 100, FTSE 100, Nikkei, SSE, SZSE, TSX, Sensex, FWB, and HKEX. The daily adjusted closing price of these companies was collected from 1 January 2010 to 25 January 2018. The unit root test and variance ratio test were employed to test the random walk model. The results revealed that only the Toronto Stock Exchange follows the random walk. The rest of the stock exchanges examined do not follow random walk model. Thus, technical analysts cannot generate abnormal returns in the Toronto Stock Exchange but can do so in other stock exchanges.
