Explain Weak-form deficiency in Efficient Markets Hypothesis
Explain Weak-form deficiency in Efficient Markets Hypothesis.
Expert
Weak-form efficiency: In weak-form efficiency excess returns can’t be made by using investment strategies based upon historical prices or the other historical financial data. If such form of efficiency is true then this will not be possible to make excess returns using methods like technical analysis. The trading strategy incorporating historical data, like price and volume information, will not systematically outperform a buy-and-hold strategy. This is frequently said that current prices accurately incorporate all historical information, and that current prices are the best estimation of the value of the investment. Therefore prices will respond to news, but when this news is random then price changes will also be random. Means technical analysis will not be profitable.
Why is GARCH important?
Who measured risk as coherent, in finance theory?
Explain the advantages and limitations of the internal rate of return method?
Give any benefits you can think of for any company to source new equity capital from foreign investors in addition to domestic investors. An enhancement in demand will normally increase the stock price and develop
What are the ways to make the financial trades on an organized exchange?
Who concluded that stock prices were unpredictable and coined the phrase ‘market efficiency’?
What are the characteristics of calibration?
What is Extreme Value Theory?
Why are most futures positions closed out through a reversing trade instead of held to delivery?In forward markets, about 90 percent of all contracts that are primarily established result in the short making delivery to the long of the asset und
What is Meant by ‘Complete’ and ‘Incomplete’ Markets?
18,76,764
1943347 Asked
3,689
Active Tutors
1422225
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!