Describe the meaning of efficient markets

Assignment Help Finance Basics
Reference no: EM1356052

Please explain the meaning of efficient markets. Why might we expect markets to be efficient most of the time? In recent years, several securities firms have been guilty of using inside information when purchasing securities, thereby achieving returns well above the norm (even when accounting for risk) does this suggest that the security markets are not efficient... I don't understand that can you please explain

Reference no: EM1356052

Questions Cloud

How would you setup the agenda for the meeting : Who would you invite to a meeting to discuss your organizations global expansion objectives
Determine the expected constant growth rate : Determine the expected constant growth rate of dividends for a stock currently priced at $50, that just paid a dividend of $4,
Question on notes receivable journal entries : Prepare the entries that would be recorded by Menachem Inc. for the sale and for the receipts and interest on the following dates. (Assume that the effective interest method is used for amortization purposes.)
Impact an organization''s ability to innovate successfully : Are these two forces mutually exclusive, or do you perceive a balance that can be struck between change and stability? Provide a detailed example that will support your position.
Describe the meaning of efficient markets : Describe the meaning of efficient markets and explain why might we expect markets to be efficient most of the time? In recent years, several securities firms have been guilty of using inside information when purchasing securities,
Prepare journal entries for land : Land was given to the company by the State of Florida to use as a manufacturing facility site. The market value of the land at the time of the donation was $102,000. Prepare journal entries for Overland Company to record the above transactions
Explain mark is a cpa in a large city who audited : Explain Mark is a CPA in a large city who audited the financial statements of a firm that sold specialized computer equipment around the world.
How many units will be traded at a cost : How many units will be traded at a cost of $35? At a price of $14. Which participants will be dissatisfied at these prices.
Crisis management : Can someone explain the difference between management and leadership in detail?

Reviews

Write a Review

Finance Basics Questions & Answers

  Describe opportunity cost rate

What is an opportunity cost rate, is it used in the discounted cash flow analysis.

  Determine the average return on security

Assume the security I and security J have the following historical returns: determine the average return on security I?

  Relaxation of credit standards

Lewis corporation is planning relaxing its credit standards to increase its currently sagging sales. As a result of the proposed relaxation, sales are expected to increase through 10 percent from 10,000 to 11,000 units during the coming year.

  Gdp-fiscal and monetary policy

Describe and discuss the concepts of federal deficit and the national debt. How statistically significant are they for the United States as compared to other countries? Discuss how the deficits and debt arise.

  What impact would a change

Under what circumstances would the risk-free rate change and what impact would a change, higher or lower, have on the cost of debt?

  Determine value of the call option

The price of stock will be either $60 or $80 at the end of year. Call options are available with 1 year to expiration. T-bills currently yield 5%.

  Find the change in operating cashflow

The upgrade will cost the firm a combined total of $23,000,000 up front, but will lower operating expenses by 4,400,000 per year forever. The company is facing a 38 percent tax rate.

  Use of debt in capital structure

Why might firms whose sales levels change drastically over time choose to use debt only sparingly in their capital structures?

  Calculation of expected return and beta

Calculation of expected return, beta, coefficient of variation, standard deviation and required rate of return

  Calculation of the risk-free rate

Calculation of the risk-free rate or the rate of return on a risk-free portfolio and suppose that securities A and B are perfectly negatively correlated

  Computing the firm''s equity multiplier at given a debt ratio

Computing the firm's equity multiplier at given a debt ratio and Dreisen Traders has total debt of $1,233,837 and total assets of $2,178,990.

  Present value of winnings

The USA Sweepstakes has informed Nancy which she won $1 million. Find out the present value of her winnings with a discount rate of 12 percent?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd