Answered: Why are we still talking about the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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: Why are we still talking about the Efficient Market Hypothesis all these years later?

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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Introduction

Stock, sometimes known as capital stock, is made up of the shares into which a corporation or company's ownership is divided.A single share of stock represents a fractional ownership interest in the company based on the total number of shares.

In order to avoid fraud, safeguard investors, and advance the general economy, governments often impose strict regulations on the buying and selling of stock, whether it is done privately or on stock exchanges. The equities are placed in an electronic format, or "Demat account," with the depositories.

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