 In this section, I will be telling you about the efficient market hypothesis, which is abbreviated as EMH. It is basically an application of rational expectations and that it helps us in explaining how the prices of the stocks and other securities are determined. This particular theory was developed on the basis of the PhD dissertation of Eugene Farmer that was submitted in 1960s. So, basically it tells us about the determination of the prices of the stocks and other securities. And it also, it is basically assumed on the basic principle that whatever information is available pertaining to any stock or any security that is equally available for all the different types of individuals that who are participating in a market, in a financial market. So, the level of information is the same among all the participants of the financial market and that information is basically reflected in terms of the prices of the stocks or the securities. So, in other words, if we want to determine the value of the return according to efficient market hypothesis, it can be given by the formula which you can see right now. It is basically the difference between the future price of that particular security minus the current price of the security. And then we add the cash payments that are expected or that we are going to get from that particular security in the form of dividends or any other payments. So, here the capital R is the rate of return on the time of security which is being held from the time period t to t plus one. So, Pt plus one is the price of the security at time t plus one and Pt is obviously the time period, the price of the security at a prior time period, the reference time period from where we are trying to, the time period which we are considering as the base period. And then C stands for the cash payment and it can be dividends or any other cash payment that a person or an investor can get from time period t to t plus one. So, similarly, using the same formula, we can find out the expected returns. That means what what return I am expecting in future and for that purpose, I will be taking it into account in order to calculate the expected return. I will be taking into account the expected future price of that security. So, you can see that there is a little superscript of e at the top of Pt plus one. So, Pt plus one is the future price and when we put e at the top of it, it means that we are now talking about the future expected price. So, in order to calculate the expected return, we take into account the future expected price and then we subtract the current price or the prior time periods price and then obviously the cash payment will be added to it and the whole thing will be divided by Pt. So, this is how we get the return the expected return. So, efficient market hypothesis says that when we when we are talking about the equilibrium, it is essential that the optimal forecasted return that means that you have considered all the relevant information about a certain stock or security. And on the basis of how it is going to perform in future, you are going to find out the expected price in the future, the whatever possible cash payments are there and then we calculate the expected return. The expected return should be equivalent to the if we have we are having a certain value of the current return value, then we then the equilibrium situation can be obtained at a point where the optimal forecasted return return becomes equal to whatever return is there in the market. So, this is how we can establish the equilibrium level where simply we can put up that equilibrium rate is that rate where the optimal forecasted value becomes equivalent to the current returns value. Basically, it all it depends that the since people are very much clear about the level of information or the type of fluctuations or movements that are going to occur in the market pertaining to a certain stock. They consider all that information they utilize that information and then they accordingly decide for a certain optimal forecasted value of the return and that helps them in determining the equilibrium level of. Returns in the of a certain from that can be yield that can be earned from a certain stock or a security.