examine the efficiency of financial markets. Shleifer (2000) states

an average investor - whether an individual, a pension fund, or a mutual fund cannot hope to

consistently beat the market, and the vast resources that such investors dedicate to analyzing,

picking, and trading securities are wasted (p. 1). If this is the case, do you think the financial

market knows best? Are the market prices fair? Why? What forces prevent them from becoming

unfair (i.e., overpriced or underpriced?)

Further, as a financial manager, you will need to consider the many variables that play into

the financial decision-making process. What specific factors do you need to consider as you think

about the efficiency of financial markets?