The Inefficiency of the Efficient Market Hypothesis Almost half a century after it surfaced in the financial literature, the Efficient Market Hypothesis (EMH) is still taught in schools and occasionally debated in public arenas Like most models in finance, it is what economist Robert Shiller calls a half truth The basic premise is that financial markets are so efficient at integrating information into asset prices that none has the opportunity to make profits, or none can beat the market Over time, researchers have developed special versions of the EMH, including the weak, semi strong and strong EMH, assuming various degrees of flexibility in its assumptions In this weeks Discussion you will critically analyze the assertions of the EMH and draw conclusions on its implications for understanding the short and long term dynamics of financial markets To Prepare Review this weeks Learning Resources, as well as other resources you may access from tthe Internet Post by Day 3 a 3 to 6 paragraph critical evaluation of the Efficient Market Hypothesis Please make sure to include responses to the following specific questions 1 To what degree do you think that the size (how much money they have) of financial market participants (investors) affects the validity of the EMH In other words, would the EMH be more or less valid if there were many large institutional investors participating in the markets 2 To what degree does the level of expertise of investors affect the validity of the EMH For example, if every investor had a Ph D in Finance, would the EMH be more valid, or not 3 Do you think that EMH is equally valid with all financial markets or asset categories (stocks, bonds, derivatives, mutual funds) Why or why not If not, in which markets do you believe it is least valid Why Please address clearly each of the questions in 12 paragraphs Make sure you use APA style for your response(s) and properly cite any resources you have used

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The Inefficiency of the Efficient Market Hypothesis Almost half a century after it surfaced in the financial literature, the Efficient Market Hypothesis (EMH) is still

The Inefficiency of the Efficient Market Hypothesis

Almost half a century after it surfaced in the financial literature, the Efficient Market Hypothesis (EMH) is still taught in schools and occasionally debated in public arenas. Like most models in finance, it is what economist Robert Shiller calls a half-truth. The basic premise is that financial markets are so efficient at integrating information into asset prices that none has the opportunity to make profits, or none can beat the market. Over time, researchers have developed special versions of the EMH, including the weak, semi-strong and strong EMH, assuming various degrees of flexibility in its assumptions.

In this weeks Discussion you will critically analyze the assertions of the EMH and draw conclusions on its implications for understanding the short- and long-term dynamics of financial markets.

To Prepare

Review this weeks Learning Resources, as well as other resources you may access from tthe Internet.

Post by Day 3 a 3- to 6-paragraph critical evaluation of the Efficient Market Hypothesis. Please make sure to include responses to the following specific questions:

#1 To what degree do you think that the size (how much money they have) of financial market participants (investors) affects the validity of the EMH? In other words, would the EMH be more or less valid if there were many large institutional investors participating in the markets?
#2 To what degree does the level of expertise of investors affect the validity of the EMH? For example, if every investor had a Ph.D. in Finance, would the EMH be more valid, or not?
#3 Do you think that EMH is equally valid with all financial markets or asset categories (stocks, bonds, derivatives, mutual funds)? Why or why not? If not, in which markets do you believe it is least valid? Why?

Please address clearly each of the questions in 12 paragraphs. Make sure you use APA style for your response(s) and properly cite any resources you have used.