Author : Andrew Ang
Release : 2011
Genre : Business & Economics
Kind :
Book Rating : 685/5 ( reviews)

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The Efficient Market Theory and Evidence - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Efficient Market Theory and Evidence write by Andrew Ang. This book was released on 2011. The Efficient Market Theory and Evidence available in PDF, EPUB and Kindle. The Efficient Market Hypothesis (EMH) asserts that, at all times, the price of a security reflects all available information about its fundamental value. The implication of the EMH for investors is that, to the extent that speculative trading is costly, speculation must be a loser's game. Hence, under the EMH, a passive strategy is bound eventually to beat a strategy that uses active management, where active management is characterized as trading that seeks to exploit mispriced assets relative to a risk-adjusted benchmark. The EMH has been refined over the past several decades to reflect the realism of the marketplace, including costly information, transactions costs, financing, agency costs, and other real-world frictions. The most recent expressions of the EMH thus allow a role for arbitrageurs in the market who may profit from their comparative advantages. These advantages may include specialized knowledge, lower trading costs, low management fees or agency costs, and a financing structure that allows the arbitrageur to undertake trades with long verification periods. The actions of these arbitrageurs cause liquid securities markets to be generally fairly efficient with respect to information, despite some notable anomalies.