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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
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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.
- Three '08