Explain the concept of an efficient capital market

Assignment Help Financial Accounting

Reference no: EM133334523

Questions:

A)The Random Walk Hypothesis is commonly cited as evidence that financial markets are weak-form efficient. Describe this hypothesis, and discuss whether available evidence does support this claim. Provide examples in support of your assessment. Conclude with a brief explanation of why the Efficient Markets Hypothesis is so important to financial analysts.

B)Explain the idea of an Efficient Market, and consider its importance. Develop your answer with a description of the random walk hypothesis, and consider if the available evidence is supportive of weak form efficiency. Conclude by identifying a number of examples of market anomalies, and discuss whether they can be considered as evidence that financial markets may not be efficient.

c) Behavioural Finance Theory offers an alternative interpretation of some observed patterns in financial markets. Outline some examples

D) Explain the concept of an Efficient Capital Market, and discuss the implications for investors seeking short-term gains on capital markets. Distinguish between 'weak-form efficiency', 'semi-strong-form efficiency' and 'strong-form efficiency' and suggest how each might be identified.

Reference no: EM133334523

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