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Essay / Research Paper Abstract
This 19 page paper looks at a range of investment issues. The paper discusses what is meant by efficient markets, why commercial paper is rated, its' risk return and the motivations behind companies issuing it and yield curves, the use of the primary market for the sale of treasury bonds and T-Bill auctions, the interpretation of different financial statements, negotiable certificates of deposit, bankers acceptances and Ginnie Mae and Fannie Mae. The bibliography cites 20 sources.
Page Count:
19 pages (~225 words per page)
File: TS14_TEinvcompap.rtf
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Unformatted sample text from the term paper:
relevant market information (Fama, 1965, 1991). The theory is both controversial and disputed. Those who support the hypothesis state they believe it is useless to attempt to identify stocks that
are undervalued or indulge in market predictions, and there are many academics that will support this hypothesis. The idea is that, at any given point in time, the price
of the stocks or securities, will reflect the information that is currently available about the stock itself and about the market (Fama, 1991). If this is correct then the market
cannot be beaten with a system of identifying under priced stocks. The theory has been around a long time, and was first proposed in a dissertation
for a Ph.D. by Eugene Fama, and evolved in the 1960s (Fama, 1965). In this market there were assumed to be investors that were well informed, and worked in a
logical manner; "An efficient market is defined as a market where there are large numbers of rational, profit-maximizers actively competing, with each trying to predict future market values of individual
securities, and where important current information is almost freely available to all participants. In an efficient market, competition among the many intelligent participants leads to a situation where, at any
point in time, actual prices of individual securities already reflect the effects of information based both on events that have already occurred and on events which, as of now, the
market expects to take place in the future. In other words, in an efficient market at any point in time the actual price of a security will be a good
estimate of its intrinsic value." (Fama, 1965). There are different variations of this model. The three forms that are currently seen are the weak form, the semi-strong
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