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Please help me answer this question in next hour, Thanks The Efficient Markets Hypothesis (EMH) was described by Eugene Fama to describe the behaviour of
Please help me answer this question in next hour, Thanks
The Efficient Markets Hypothesis (EMH) was described by Eugene Fama to describe the behaviour of financial markets.
- List, and for each describe, the three forms of informational market efficiency. (3 marks)
- Explain the two tests for weak form market efficiency. (2 marks)
- Behavioural finance has a different perspective to how markets work from that of the EMH. Discuss in less than 200 words how behavioural finance would explain the relative return behaviour of growth stocks using two investor biases. (2 marks)
- An argument against market efficiency is the occurrence of market crashes. The logic is that if markets are efficient, then all information about all stocks is known and therefore crashes cant happen. Discuss the argument with relevance to the efficient market hypothesis. (max 100 words) (1 mark)
- Explain why it is not possible to prove market efficiency, and state the name given to the problem. (2 marks)
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