Critical Review about implications of the Efficient Market Hypothesis

Anglický jazyk

Critical Review about implications of the Efficient Market Hypothesis

Vydavateľstvo: GRIN Verlag
Rok vydania: 2011
Formát: Paperback
Rozmer: 210 x 148 mm
Jazyk: Anglický jazyk
ISBN: 9783656040705

Na objednávku

17.55 €

bežná cena: 19.50 €

O knihe

Seminar paper from the year 2011 in the subject Business economics - Investment and Finance, grade: 1,0, University of Hull, course: Current Issues Financial Management, language: English, abstract: The study examines and critical reviews the literature for the different implications based on
the three levels of the Efficient Market Hypothesis for investors and company managers. If
the weak form of the EMH holds, the technical analyse is useless, but ninety percent of
traders in London are using it. If the semi-strong-form holds the fundamental analysis, study
of published accounts, search for undervalued companies are useless and investors should be
focus on diversification and avoiding of transaction costs. Furthermore the semi-strong form
would imply for managers, that accounting disclosure to deceived shareholders is useless, the
company market value is the best indicator for the company value and management decisions,
the company does not need specialists for the timing of issues and there are no opportunities
for a cheap acquisition of another company. At least if the strong-form of the EMH holds, it
would imply that even with insider information it would not be possible to get above average
returns. The literature shows, that the studies of EMH have made an important contribution to
our understanding of the security market. It also shows that in some cases scientific results do
not strong influence the behaviour of manager and investors in the "real world".