Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. the purpose of this assignment is to allow the stu

The purpose of this assignment is to allow the student an opportunity to explain what it...

80.2K

Verified Solution

Question

Finance

The purpose of this assignment is to allow the student anopportunity to explain what it means to have an efficient capitalmarket. Students will gain an understanding of the different levelsof market efficiency and how behavioral finance can inhibitreaching market transparency.

Explain in 525 words what it means to haveefficient capital market, including:

  • Describe the behavioral challenges in achievingefficiency.
  • Discuss the three forms of market efficiency.
  • What are the implications to corporate finance?
  • Would you consider the real estate market an efficient capitalmarket? Please explain why or why not.

Answer & Explanation Solved by verified expert
4.2 Ratings (648 Votes)
Efficient Capital Market Market efficiency is always related with market information So in market information if its flow properly then it will reflect in market price movements There are three degrees of market efficiency 1 Weak form When historical price movement is not reflect in present and future price movement of any stocks That means available information is not fully equipped which can be reflect the price of the future In this scenario excess returns can be possible through fundamental analysis Security prices reflect all information found in past prices and volume Often weakform efficiency is represented as Pt Pt1 Expected return random error t Since stock prices only respond to new information    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Chapter 7: The Integumentary System and Body Membranes MULTIPLE CHOICE 1. Which of the following is not an...

Medical Sciences
Q

A. Describe the histological process by which the kidney concentrates urine, name the cells and tissues...

Medical Sciences
Q

Will Chick-fil-A’s change in promotional strategy affect its level of growth and success?

Operations Management
Q

Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a...

Accounting
Q

The length of potentiometer wire is L A cell of emf e is balanced at...

Physics
Q

If you want to earn $725.00 of simple interest at a rate of 7% in...

Basic Math
Q

5 Explain how Carlos will use special triangles to find the height of the flagpole...

Basic Math
Q

Consider the function 0 f x f x f x 1 0 x 2 x...

Basic Math
Q

Warner Company's year-end unadjusted trial balance shows accounts receivable of $116,000, allowance for...

Accounting
Q

Compute net nonoperating obligations (NNO) for 2016 and 2015. Compute return on equity (ROE) for...

Accounting
Q

An analysis of total labor costs into work in process and factory overhead components is...

Accounting
Q

Warm-Up 8-3 (similar to) Question Help The expected annual returns are 13% for investment 1...

Finance