2012.04.30 - ECON1101, Week 9 Lecture Notes

The theory that the current price of shares in a

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Unformatted text preview: MARKET HYPOTHESIS !  The theory that the current price of shares in a company reflects all relevant information about its current and future earnings prospects. !  Why isn’t a share portfolio consisting of Australasia’s ‘best managed companies’ necessarily a good investment? 9-27 MARKET EQUILIBRIUM !  A market in equilibrium is one which no additional opportunities for gain remain available individual buyers or sellers !  Where gains exists, the invisible hand pushes markets towards equilibrium !  Resulting allocation of resources need not be socially optimal 9-28...
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This note was uploaded on 03/12/2014 for the course ECON 1101 taught by Professor Julia during the Three '08 term at University of New South Wales.

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