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3531Week6W11 - Week 6 Stock Price Behaviour and Market...

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1 Week 6 Stock Price Behaviour and Market Efficiency
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McGraw-Hill Ryerson Limited 2 Market Efficiency The Efficient market hypothesis (EMH) is a theory that asserts: the major financial markets reflect all relevant information at a given time. Market efficiency research examines the relationship between stock prices and available information. The important research question : is it possible for investors to ―beat the market?‖ Prediction of the EMH theory: if a market is efficient, it is not possible to ―beat the market‖.
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