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The answer to your question depends on the type of equilibrium. In a perfect information rational expectations equilibrium with preferences that assume that agents always prefer more money to less, the equilibrium is efficient with respect to the information. If you introduce biases in preferences or different information sets (differing ability to interpret ...


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Read paper written by Malkiel, "The Efficient Market Hypothesis and Its Critics". It is wonderful paper on EMH. http://eml.berkeley.edu/~craine/EconH195/Fall_14/webpage/Malkiel_Efficient%20Mkts.pdf It will help you to gain conceptual clarity in EMH.


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Market is efficient when all available public information gets priced-in relatively fast by market participants. This yields the fair price. Efficiency depends on the speed of the information dissemination. Equilibrium is a balance between supply and demand, which can be skewed by short term liquidity issues. So market can be efficient and not in equilibrium ...


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Existence of arbitrage opportunities does not lead to market as inefficient. Samuelson has defined relationship between existence of arbitrage opportunities and market efficiency. He said, if market adjust quickly to arbitrage opportunities to return back to normal without cost of any other investor and through market mechanism then market can be said ...


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It seems reasonable that no-arbitrage doesn't necessarily imply EMH. If we are talking pure arbitrage opportunities, like offsetting the same contract on 2 exchanges, futures cash and carry, BS options no-arbitrage, etc. Mainly, for derivative products it's very easy to do the arbitrage trade. However, this means that you are assuming the underlying product ...


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EMH: An asset always trades at its fair value. That is, all information is continuously being priced in. RWH: The asset price is not predictable and follows a random walk. So RWH is a hypothesis which is consistent with EMH. If every piece of information is being priced in continuously, and you cannot predict what information will become available, then ...



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