Business 123 Introduction to Investments May I please have the fundamental and concept for the following statement? Thank you, Identify the three main efficient market hypotheses and the random walk hypothesis

Business 123 Introduction to Investments May I please have the fundamental and concept for the following statement? Thank you, Identify the three main efficient market hypotheses and the random walk hypothesis

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter17: Retirement And Estate Planning

Section: Chapter Questions

Problem 4LTAI

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Business 123 Introduction to Investments

May I please have the fundamental and concept for the following statement?

Thank you,

Identify the three main efficient market hypotheses and the random walk hypothesis

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

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