Market Efficiency

Market Efficiency

Write a report of 1,000 words discussing the title below. “What is meant by the term ‘Market Efficiency’ when used in the context of financial markets? Explain what this term refers to and why this concept is important for investors.” Guidelines: A report should comprise facts, a discussion of the facts supported by evidence/examples or data, and finishing with a concluding paragraph. Supplementary charts +/or other data may be included. Possible elements of the report might include;

Market Efficiency

*Summary and overview of what efficiency in financial markets – are there degrees of efficiency? * Ask the question – How do we know whether this concept actually exists or not? What tests for Market Efficiency exist, discuss – the articles provide examples of tests What examples of stock price movements that might demonstrate market efficiency can be provided; Source: google or yahoofinance.com for charts of share price movements which might illustrate market efficiency or inefficiency * Explain why is it important? Explain the implications for investors of financial market efficiency vs. financial market inefficiency.

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