Connect 1-Semester Access Card for Essentials of Investments
Connect 1-Semester Access Card for Essentials of Investments
10th Edition
ISBN: 9781259354977
Author: Zvi Bodie, Alan Marcus, Alex Kane
Publisher: McGraw-Hill Education
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Chapter 9, Problem 5PS
Summary Introduction

To determine:

Possible implication on investment of the behavioral critique

Introduction:

In the past decades, with many academics adhering to the pricing of behavioral finance, it has come to a place of prominence. However, this theory also has some critics attached to it.

For example, people that support EMH (efficient market hypothesis) stands to be opponents of the behavioral finance. Efficient market hypothesis is considered as basis of finance in the modern era. However, this theory accounts for irrationality as it states that the security price represents the entire information as a whole.

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