What is meant by an efficient security market

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Read the article "The efficient market hypothesis and its critics" by Burton Malkiel (2003). Answer the following questions:

1. What is meant by an efficient security market? There are various views that are put forward in the paper which point to a common idea of market efficiency. Elaborate on these views.

2. Explain how is the efficient market hypothesis associated with the idea of a "random walk".

3. Identify and discuss the patterns of possible predictability implied by studies of the behavior of past stock prices.

4. What are some of the valuation parameters (both cross sectional and time series) which explain the predictable patterns of stock returns?

5. Explain the arguments (with supporting examples) put forward by opponents who view efficient markets as an untenable hypothesis.

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Reference no: EM131132476

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