Friday, March 6, 2009

The Efficient Market Hypothesis Debate Continues

The efficient market hypothesis--that the price of an asset (like the price of a share of stock) captures all available information about that asset--is taking a beating again in light of recent market volatility.

Here's a nice feature from the Economist:

"THE past ten years have dealt a series of blows to efficient-market theory, the idea that asset prices accurately reflect all available information. . . . There is now widespread acceptance that investors can behave irrationally, creating very large anomalies."

No comments:

Post a Comment