BUSINESS FINANCE I Dersi Risk and Return soru detayı:
SORU:
How can the statement of Efficient Market Hypothesis (EMH) be explained?
CEVAP: In an (informationally) efficient market, prices fully reflect all available information. In such a market it should not be possible for market participants to consistently earn excess returns, beyond the return appropriate to investments of that level of risk. Two important parts of the EMH definition that we should pay more attention to are “fully reflect” and “all available information”.
In an (informationally) efficient market, prices fully reflect all available information. In such a market it should not be possible for market participants to consistently earn excess returns, beyond the return appropriate to investments of that level of risk. Two important parts of the EMH definition that we should pay more attention to are “fully reflect” and “all available information”.