Efficient spiderman costumes Market Hypothesis

The efficient market hypothesis (EMH) spiderman costumes was promoted by Eugene Fama in the 1960. For example Malkiel (1992) proposed the following definition:

A capital market is said to be efficient to if it fully and correctly reflects all relevant information in red spiderman costumes determining security prices. Therefore, more formally, the market is efficient with respect to some information set. Secondly strategies that have minimal execution costs such as randomly diversified portfolio or indexing to the market would be superior to any other investment strategy. Thirdly, a strategy that has minimum transaction costs should provide higher returns in the long run (Damodaran, 2006).

Nevertheless it is important to stress that markets are not efficient due to their nature, but they are driven to efficiency by the actions of the investors. Therefore the efficient market should be seen as a self correcting mechanism, where inefficiencies appear at regular intervals but disappear almost instantaneously as investors find and trade on them.

EMH has wide applications in the financial markets, since it is easily extended to the valuation of companies , market failures such as an Enron Case, or performance analysis of the mutual funds. The traditional analysis of the market efficiency is based on the analysis of the anomalies such as Peso Effect in the foreign exchange market or devoted to the predictability of the stock returns.
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