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Unformatted text preview: Ch 11 Random Walk- Price changes should be random and unpredictable. Efficient Market Hypothesis stocks already reflect all available information after the stocks incorporate the new news there is no further drift top line- average price movement of stocks that receive a positive report efficiency differs across markets 1. Weak form stock prices already reflect all information that can be determined by examining data such as historical prices, trading volume or short interest this data conveys signals about future performance and since it is readily available such signals result in an immediate price change thus those signals lose their value 2. Semi strong-form all publicly known information regarding the firms must already be reflected in the stock prices it ads to the past data the most current data such as product line, balance sheets, management etc....
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This note was uploaded on 01/26/2009 for the course FBE 441 taught by Professor Callahan during the Fall '07 term at USC.
- Fall '07