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Assume that owing to the explosion of computers and the expert training of security analysts, the...

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Finance

Assume that owing to the explosion of computers and the experttraining of security analysts, the market, as confirmed by numerousstudies, has been shown to be 95% efficient. Investment firms have,thus, decided to retire all their portfolio managers and let randomchoice govern the security selection process. What mistake isimplicit in this action?

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In the wake of rising use of Artificial Intelligence and Robotics efficiency has improved many folds in various sectors specially the service sector Long before this faster algorithms have been developed in the security markets to reap the benefits of arbitrage and make profits on transactions Most of the theories on Capital market be it the Capital market Theory or the Modern Portfolio Theory    See Answer
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Assume that owing to the explosion of computers and the experttraining of security analysts, the market, as confirmed by numerousstudies, has been shown to be 95% efficient. Investment firms have,thus, decided to retire all their portfolio managers and let randomchoice govern the security selection process. What mistake isimplicit in this action?

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