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Overview of capital market efficiency

Provide a brief overview of Capital Market Efficiency?

E

Expert

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Capital Market Efficiency:

A) The demand-supply for securities is better reflected in prearranged markets.

B) Any price which balances the whole supply and demand for a security is the market equilibrium price.

C) The security’s true value is the price which reflects investor’s estimation value of the cash flows which they predict to obtain in the future.

D) In a proficient capital market, security prices completely reflect the knowledge and expectations of each and every investor at a specific point of time.

E) The complete efficiency of a capital market based on its operational effectiveness and its informational effectiveness.

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