Strong form level of efficiency, Financial Management

Strong form level of Efficiency

This level states that price reflects all the available public and private information (past, present and future information). If the hypothesis is correct, then, the mere publication of information that was previously confidential should not have impact on share prices. This implies that insider trading is impossible. It follows therefore, that in order to maximize shareholders’ wealth, managers should concentrate on maximizing the NPV of each investment.

Tests that have been carried out on this level have concentrated on activities of fund managers and individual investors. If the markets have reached the strong form levels, then fund managers cannot consistently perform better than individual investors in the market.

Posted Date: 12/8/2012 7:18:29 AM | Location : United States

Related Discussions:- Strong form level of efficiency, Assignment Help, Ask Question on Strong form level of efficiency, Get Answer, Expert's Help, Strong form level of efficiency Discussions

Write discussion on Strong form level of efficiency
Your posts are moderated
Related Questions
You invest $1,000 at an annual interest rate of 5% compounded continuously. How much is your balance after 8.5 years?  How long will it take you to accrue a balance of $4,000? What

Q. Process of financing working capital? Working capital policies on the process of financing working capital can be characterised as moderate, conservative and aggressive. A c

Calculate the amplitude of the DC component: A periodic voltage consists of sinusoidal pulses having an amplitude of 150 V (SEE DIAGRAM BELOW). Use Fourier Series Expansion to

Weaver Chocolate Co. expects to gain $3.50 per share during the present year, its expected dividend payout ratio is 65%, its expected constant dividend growth rate is 6.0%, and its

The drawbacks of the payback approach are as follows - Payback ignores the overall profitability of a project by ignoring post payback cash flows. In the illustration above the

SEC Filings -Informational and financial DISCLOSURES required by SEC in order to comply with many sections of the Securities Act of 1933 and Securities and Exchange Act of1934. A n

Placement on career path: The next step of the career planning process is to place an individual on a chosen career path. A career path is the logical possible sequence of pos

Interest rate caps as well as collars are available on the over the counter (OTC) market or may be devised using market based interest rate options. They may be utilize to hedge cu

Imagine you have been allocated $100,000 which is to be invested in 8 companies listed on the Australian Stock Exchange (ASX). You are required to have a balanced portfolio betwee