Stock Market Efficiency: How Does It Reflect on the Securities Trading
Stock Market Efficiency: How does It Reflect on the Securities Trading Abstract:
Stock market efficiency has been the subject matter of research studies for periods well over the past three decades. Several theories have been established about basically how the competition will drive all information into the prices of securities quickly. Centering this idea the concept known as Efficient Market Hypothesis has been evolved which also has been the subject of intense debate among academics and financial professionals. Efficient Market Hypothesis states that at any given time security prices fully reflect all available information. It is stated that if the markets are efficient and current prices fully reflect all information then buying and selling securities in an attempt to outperform the market will effectively be a game of chance rather than skill. Several stock market anomalies have also been uncovered to undermine the efficient market hypothesis. This dissertation paper attempts to report on the efficiency of the stock market advocated by the efficient market hypothesis and its effect on the trading of securities on the basis of a review of the available literature. . While trying to support the premises that trading in the securities to outperform an efficient market is a game of chance rather than skill, the paper also make a critical analysis of various stock market anomalies.
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Stock Market Efficiency: How does It Reflect on the Securities Trading Table of Contents Abstract Table of Contents Chapter 1 Introduction Chapter 2 Objectives, Scope and Methodology of the Dissertation 2.1 Objectives of the Study 2.2 Scope of the Study 2.3 Research Approach 2.3.1. Research Strategy 2.3.2 Data Collection Methods 2.4 Structure of the Dissertation Chapter 3 Literature Review 3.1 Efficient Market Theory 3.2 Types of Market Efficiency 3.3 Need for Market Efficiency 3.4 Levels of Market Efficiency 3.5 Reflections of an Efficient Market on Securities Trading 3.6
Stock market efficiency has been the subject matter of research studies for periods well over the past three decades. Several theories have been established about basically how the competition will drive all information into the prices of securities quickly. Centering this idea the concept known as Efficient Market Hypothesis has been evolved which also has been the subject of intense debate among academics and financial professionals. Efficient Market Hypothesis states that at any given time security prices fully reflect all available information. It is stated that if the markets are efficient and current prices fully reflect all information then buying and selling securities in an attempt to outperform the market will effectively be a game of chance rather than skill. Several stock market anomalies have also been uncovered to undermine the efficient market hypothesis. This dissertation paper attempts to report on the efficiency of the stock market advocated by the efficient market hypothesis and its effect on the trading of securities on the basis of a review of the available literature. . While trying to support the premises that trading in the securities to outperform an efficient market is a game of chance rather than skill, the paper also make a critical analysis of various stock market anomalies.
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Stock Market Efficiency: How does It Reflect on the Securities Trading Table of Contents Abstract Table of Contents Chapter 1 Introduction Chapter 2 Objectives, Scope and Methodology of the Dissertation 2.1 Objectives of the Study 2.2 Scope of the Study 2.3 Research Approach 2.3.1. Research Strategy 2.3.2 Data Collection Methods 2.4 Structure of the Dissertation Chapter 3 Literature Review 3.1 Efficient Market Theory 3.2 Types of Market Efficiency 3.3 Need for Market Efficiency 3.4 Levels of Market Efficiency 3.5 Reflections of an Efficient Market on Securities Trading 3.6
References: 1. Chris R. Hensel and William T. Ziemba (1996)"Investment Results from Exploiting Turn-of-the-Month Effects," Journal of Portfolio Management, Spring 1996. 4. Eugene F. Fama (1995) "Random Walks in Stock Market Prices," Financial Analysts Journal, September/October 1965 (reprinted January-February 1995). 5. Ghauri, P., Gronhaug K and Kristianslund I., (1995) “Research methods in business studies – a practical guide” Hempstead, Prentice Hall 6 7. James P. O 'Shaughnessy (1998) What Works on Wall Street: A Guide to the BestPerforming Investment Strategies of All Time Edition II McGraw Hills 8 9. Marc R. Reinganum (1997) "The Size Effect: Evidence and Potential Explanations," Investing in Small-Cap and Microcap Securities, Association for Investment Management and Research, 1997. 11. Professor Josef Lakonishok, Robert W. Vishny, and Andrei Shleifer,(1993) "Contrarian Investment, Extrapolation and Risk," Working Paper No. 4360, National Bureau of Economic Research, May 1993. See also in The Journal of Finance, December 1994. 12. Ray Ball (1995)"The Theory of Stock Market Efficiency: Accomplishments and Limitations." Journal of Corporate Finance (May 1995). 13. Robert Haugen and Philippe Jorion, (1996)"The January Effect: Still There after All These Years," Financial Analysts Journal, January-February 1996. 14. Robert C. Higgins (1992) Analysis for Financial Management 3rd edition 1992 McGraw Hill 15 16. Werner F.M. DeBondtand Richard Thaler (1985)"Does the Stock Market Overreact?" The Journal of Finance, July 1985.