The concept of efficient market hypothesis has weak foundations. The effectiveness of these assumptions depends on the strength of one of the three situations. Consistent investment decisions, liberated irrational investment decisions, and arbitrage. In practice, none of these three conditions is valid. An alternative method, based on psychology, to explain capital market performance is gaining importance in the field of finance. The concept of "efficient market hypothesis" was introduced by Eugene Fama in the mid-1960s. According to this concept, the fierce struggle in the capital market leads to a reasonable valuation of debt and equity securities. The perception is based on the replication of related evidence in the market prices of securities. If only past information was reflected in “weak and efficient” markets; past and present information is reflected in “efficient and semi-strong markets”; past, present, and future information is reflected in “strong-form, efficient markets.” The efficient market hypothesis has reflective effects on corporate finance and investment management. Implications for corporate finance1. Managers cannot fool the market through imaginative accounting.2. Companies cannot effectively expand debt and equity issues.3. Managers cannot successfully venture into the securities market.4. Managers can earn profits by being responsive to market prices. Implications for investment management1. If the market is efficient in weak form, investors cannot obtain unusual returns by evaluating past information about securities. However, it is possible to achieve unusual returns by examining existing information and future information. So, investment tools like sieve plan, technical analysis will not be middle of paper... motivation to trade, and small inefficiencies might not be eliminated. Limits of Arbitrage Ideally, if two securities are mispriced relative to their risk, one is sold short and the other is also purchased. Selling one and obtaining the other can lead each to their economic value. Here are four questions. It is not certain that one day, or even one day, costs will be able to return to balance. Valuation errors could become even more pronounced in the meantime, likely forcing the businessman to close the position. Two assets rarely present identical risks. If there are no close substitutes for a given security, no arbitrage is possible. Arbitrators have restricted access to capital. Only the most obvious pricing errors are exploited. Arbitrators could face restrictions on mercantilism from owners of the capital they use.