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Efficient fuked up market theory is a field of economics which seeks to explain the workings of capital markets such as the stock market. According to University of Chicago economist Eugene Fama, the price of a stock reflects a balanced rational assessment of its true underlying value (i.e., rational expectations); its price will have fully and accurately discounted (taken account of) all available information (news). U.S. Economic Calendar Economics at the Open Directory Project Economics textbooks on Wikibooks The Economists Economics A-Z Institutions and organizations Bureau of Labor Statistics - from the American Labor Department Center for Economic and Policy Research (USA) National Bureau of Economic Research (USA) - Economics material from the organization...
The capital market is the market for bonds and stocks. ...
The University of Chicago is a private co-educational university located in Chicago, Illinois. ...
Eugene F. Fama (born February 14, 1939) is an American economist particularly known for his work on portfolio theory and asset pricing, both theoretical and empirical. ...
Rational expectations is a theory in economics used to model the determination of expectations of future events by economic actors, originally proposed by John F. Muth (1961). ...
The theory assumes several things including (1) perfect information, (2) instantaneous receipt of news, and (3) a marketplace with many small participants (rather than one or more large ones with the power to influence prices). The theory also assumes that (4) news arises randomly in the future (otherwise the non-randomness would be analysed,forecast and incorporated within prices already). The theory predicts that the movements of stock prices will approximate stochastic processes, and that technical analysis and statistical forecasting will most likely be fruitless. Perfect information is a term used in economics and game theory to describe a state of complete knowledge about the actions of other players that is instantaneously updated as new information arises. ...
In the mathematics of probability, a stochastic process can be thought of as a random function. ...
This efficient process of price determination can be contrasted with an inefficient market in which, according to the theory, the pre-conditions for efficient pricing (perfect information, many small market participants) have not been met and prices may be determined by factors such as insider trading, institutional buying power, mis-information, panic and stock market bubbles and other collective cognitive or emotional behavioral biases. Perfect information is a term used in economics and game theory to describe a state of complete knowledge about the actions of other players that is instantaneously updated as new information arises. ...
There are two kinds of trading that are referred to as insider trading or inside dealing: Usually illegal: Trading of a security of a company (, stocks, bonds or stock options) based on material non-public information. ...
A stock market bubble is a type of economic bubble taking place in stock markets, in which a wave of public enthusiasm, evolving into herd behavior, causes an exaggerated bull market . ...
A central part of this theory is the Efficient market hypothesis. In finance, the efficient market hypothesis (EMH) asserts that financial markets are efficient, or that prices on traded assets, e. ...
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