Market efficiency Essay Example | Topics and Well Written Essays - 1750 words

Market efficiency - Essay Example There are various forms or degrees of market efficiency which exists. These comprise of strong market efficiency, semi-strong market efficiency and the weak form market efficiency (Ho & Yi, 2004; p. 57). Acknowledging the efficient market hypothesis in its simplest and purest form might be hard; nevertheless there are three main types of efficient market hypothesis which have the purpose of reflecting the extent to which it can be used in the security markets. First is the strong-form efficiency which is the strongest form and it states that all information and facts in the market, whether in the public or private hands is incorporated in the stock prices. There is no insider information that might grant the investor an extra advantage (Cataldo, 2003, p. 27). Secondly, there is the semi-strong efficiency form of efficient market hypothesis. This asserts that all public information present in the market is used in the derivation of the stock’s present price. In this form of eff iciency fundamental and technical analysis cannot be applied to achieve better profits for the investor. Lastly, there is the weak form efficiency which alleges that all historical prices of a security are replicated in the current stock’s price. Thus, technical analysis cannot be of any use in predicting the future stock’s price and eventually beating the market (Basse & Bassen, 2010; p. 51). Part II Evaluation of the Market Efficiency The nature and type of information is not required to be constrained to financial news and studies only. As a matter of fact political news economic news and news regarding social events merged with the way the investors incorporate such information, whether it might be true or mere rumors, will be replicated in the securities prices. According to the theory of the efficient as prices react to similar information there is no investor who will be in a position to earn superior profits over the other. This kind of observation is seen in s trong form efficiency where all available public information is incorporated in the stock’s price (Zhang, 2008; p. 66). Using the random Walk theory asserts that in any efficient market, prices normally become unpredictable such that they are random. In this respect, there is no investment trend that can be detected in such a manner that any predetermined approach to investing in the stock might not be that profitable. This type of ‘Random Walk of stock’s prices described in the school of thought of the efficient market hypothesis might lead into a failure of any form of investment plan that has the main objective of beating the market regularly (Moyer, Mcguigan, & Kretlow, 2009; p. 48). As a matter of fact the theory proposes that any transaction cost incurred in the management of portfolio might be more successful for an investor to place his or her money into index funds (Bauwens & Giot, 2001; p. 49). Evidence against the Efficient Market Hypothesis (EMH) Ther e are some anomalies within the market that cannot allow an investor to use the historical prices, private information or public information to obtain abnormal profits. In an actual market of investment, arguments against the Efficiency market hypothesis. Some authors claim that there are investors who have beaten the market and obtained abnormal profits (Graham, Smart & Megginson, 2010; p. 359). A point of focus is especially on the argument that there are sometimes stocks in the market which have been

Db3 2 training and development Research Paper Example | Topics and Well Written Essays - 250 words

Db3 2 training and development - Research Paper Example In their article, â€Å"New Developments Concerning Negligent Training†, they describe age and pay among various types of discrimination that are important to employers. Issues of hiring and firing concepts, which have been controversial in terms of employment, have also been discussed. Three cases regarding sexual harassment as a form of discrimination have been taken up. They conclude by saying that employers must keep track of labor laws and how they can adapt themselves to the changes. Employers should focus on reducing the risks of negligent training. The best method of limiting exposure is by educating managers. They should be made aware about the implications of their actions (legal or otherwise), and should hence set high standards of professionalism for themselves while dealing with employees. Disciplinary action against or discharge of employees should be done keeping the privacy and dignity of employees in mind. The document flow and the number of current employees with whom a discharged employee has contact should be minimized. Procedures should be in place for a suitable time and place for a discharge to take place. The procedure for recruitments should be centralized. If the number of interviewers is minimized, the scope for exaggeration on the part of prospective employees can be lessened. Hence, the terms and conditions regarding the work in the organization should be spelt out by one single