Financial Accounting Blog

Tuesday, April 20, 2004

Efficient Market Hypothesis. What Is Market Efficiency? This article is a nice explanation and discussion of the Efficient Market Hypothesis. The author concludes the following:
In the real world, markets cannot be absolutely efficient or wholly inefficient. Markets are essentially a mixture of both, and daily decisions and events cannot always be reflected immediately into a market; moreover, if all participants were to believe that the market is efficient, no one would seek extraordinary profits, the force that keeps the wheels of the market turning.