Here is the synopsis of our sample research paper on Efficient Market Theory. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
A 5 page paper discussing the theoretical and empirical validity of the weak, semi-strong and strong forms of the theory. Stock market information remains less than completely reliable, as there are those companies that analysts believe should be performing at much higher levels in terms of stock price than the actual prices would indicate; there are others that analysts consistently report as being overvalued. Insider trading indicates that the strong form cannot possibly be valid. Some researchers claim that the problem lies not with the theory but with our ability to measure results correctly, calling for a non-linear, rather than linear, assessment of data. Bibliography lists 8 sources.
Page Count:
5 pages (~225 words per page)
File: CC6_KSEffMkt.doc
Buy This Term Paper »
Unformatted sample text from the term paper:
nearly to multiple generations, and still there is debate over its validity as theory or its ability to positively contribute to sound decision-making. At its base, efficient market theory
dictates that "According to the strong form of the efficient market hypothesis, at any time all relevant information, whether public or private, is already reflected in stock prices" (Moss and
Kohers, 1990; p. 63). Over the decades past, research has centered on the form fashionable at the time. In recent years, Pandey,
Kohers and Kohers (1998) say that "Random walk tests have been employed in the past to establish the weak-form efficiency in the financial markets of industrialized nations. However, recent advances
in the study of chaotic systems have sparked a renewed vigor in the examination of capital market efficiency" (p. 45). Cluck (1997) reported that between 1900 and 1959, random
walk analysis confirmed the "weak form of the efficiency market theory, i.e. charting or technical analysis does not work" (p. 33). Work in the 1960s concluded that the market
is indeed efficient in the weak form. Following that, attention turned to investigations dealing with the semi-strong form of the efficient market: "This hinged on whether the market
reacted quickly to changes in fundamental information (semi-strong efficiency) or whether it responded slowly to new dividend increases, news releases, and so forth" (Cluck, 1997; p. 33). Later, research
focus turned to investigating market efficiency in the strong form. In the 1960s, such a notion that insiders or professional money managers could profit better than any others was
only just shy of blasphemy, but research from the 1970s indicated that insiders could indeed profit from unannounced news (Cluck, 1997). If that were possible, then markets could not
...