Q9.1 Much has been written about the concept of an efficient market. It’s probably safe to say that some of your classmates believe the markets are efficient and others believe they are not.

Have a debate to see whether you can resolve this issue (at least among yourselves). Pick a side, either for or against efficient markets, and then develop your ‘ammunition’. Be prepared to discuss the following three aspects.

a. What is an efficient market? Do such markets really exist?

b. Are share prices always (or nearly always) correctly set in the market? If so, does that mean little opportunity exists to find undervalued shares?

c. Can you cite any reasons to use fundamental and/or technical analysis in your share selection process? If not, how would you go about selecting shares?