Ask Question
BusinessBusiness
2 August, 04:06

What is the efficient markets hypothesis, and how does it relate to random walks?

+1
Answers (1)
  1. 2 August, 04:15
    0
    Answer: Answer is in Explanation below

    Explanation: The efficient market hypothesis expresses that assets such as share prices are set to reflect all the information available. This means that the prices found in the markets only respond to new information.

    A random walk states that share market prices change randomly. This means that the prices cannot be forecasted. This financial theory makes it consistent with the efficient market hypothesis, as these prices are set based on available information, and only change when new info is introduced into the market. Investors do not have a say in what the price should be, and cannot claim that the share price is over or undervalued.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “What is the efficient markets hypothesis, and how does it relate to random walks? ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Chase Company has 10 employees, who earn a total of $3,400 in salaries each working day. They are paid on Monday for the five-day work week ending on the previous Friday.
Answers (1)
Which type of fund should you consider if you're seeking high long-term returns and can tolerate the normal ups and downs of the stock market? growth funds growth and income funds index funds value funds sector funds
Answers (2)
Find the sales tax of 5% on a purchase of $156.34? A) $7.82 B) $8.52 C) $9.33 D) $10.55
Answers (1)
An account balance is:Select one:a. The total of the credit side of the account. b. The total of the debit side of the account. c. The difference between the total debits and total credits for an account including the beginning balance. d.
Answers (1)
What term is used to describe the study of using limited resources to fulfill wants and needs?
Answers (1)
New Questions in Business
Appalachian mountain goods has paid increasing dividends of $.10, $.12, $.15, and $.20 a share over the past four years, respectively.
Answers (1)
What type of skills tends to be equally important at all levels of management? a. technical skills b. human skills c. decisional skills d. motivation to manage e. conceptual skills
Answers (1)
Faldo Corp sells on terms that allow customers 45 days to pay for merchandise. Its sales last year were $325,000, and its year-end receivables were $60,000. If its DSO is less than the 45-day credit period, then customers are paying on time.
Answers (1)
Which NIMS structure develops, recommends, and executes public information plans and strategies? A. Emergency Operations Center (EOC). B. Incident Command System. C. MAC Groups. D. Joint Information System (JIS).
Answers (1)
Rules of Debit and CreditThe following table summarizes the rules of debit and credit. Indicate whether the proper answer is a debit or a credit.
Answers (1)
Home » Business » What is the efficient markets hypothesis, and how does it relate to random walks?
Sign Up Forgot Password?