The feature of an efficient market , which states that the investments in the stock market have a zero net present value . Introduction: An efficient market refers to the market where the share prices of companies reflect the existing information. Net present value is the variation between the present value of cash flows to be received in the future and the initial investment.

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Chapter 10.4, Problem 10.4CCQ

Summary Introduction

To discuss: The feature of an efficient market, which states that the investments in the stock market have a zero net present value.

Introduction:

An efficient market refers to the market where the share prices of companies reflect the existing information.

Net present value is the variation between the present value of cash flows to be received in the future and the initial investment.

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