Efficient Capital Market.docx - Running head EFFICIENT CAPITAL MARKET Efficient Capital Market Name Institutional Affiliate Course Date 1 EFFICIENT

Efficient Capital Market.docx - Running head EFFICIENT...

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Running head: EFFICIENT CAPITAL MARKET 1 Efficient Capital Market Name Institutional Affiliate Course Date
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EFFICIENT CAPITAL MARKET 2 Introduction Efficient Market Theory (EMT) states that the price of an asset reflects all relevant information that is available about the intrinsic value of the assets. The inherent value suggests that the market cannot be beaten since it incorporates all essential determinative information into current asset prices. The theory assumes that investors can only gain higher return from his investment through speculation. However, the theory may not hold if there are insider trading and other unethical behaviors. In this paper, we are going to review various perspectives of efficient market theory. Form of Market Efficiency The market efficiency refers to the degree to which the prices of the asset traded in the capital market reflect all the information available to the member of the public. If we assume that
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