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Market efficiency hypotheses

• Refer to theories which try to explain financial market behavior. Some hypotheses state that the markets are rigorously efficient and operate by an immediate discounting of perfect information. Other theories state that the markets are relatively inefficient, particularly when socially-oriented goals are also to be considered. Other hypotheses state that information is good or even very good but not perfect. Also, not all market participants believe or simultaneously act on new data or information. The latter theorists believe that the markets try to attain pure efficiency. However, they also recognize that competition breeds asymmetrical change and this influences the discounting and adaption processes. A simple example will highlight this view. While improvements in technology are reducing costs and communication times, not everyone updates their systems given each and every change in chip speeds and processing power. To do so would be too expensive and this creates one of example of a marketplace paradox.

 
 

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Competition
Discounting
Efficiency
Financial market
Market
Will
 
 Related Terms
 
Auction market
Bank market
Bear market
Black market
Breadth of a market
Brokered market
Bull market
Bulldog market
Buyer's market
Capital market
Capital market efficiency
Capital market imperfections view
Capital market line
Carrying charge market
Cash market
Common market
Common stock market
Complete capital market
Corner a market
Crossed market
Currencies and major foreign market hedge funds
Dealer market
Debt market
Depth of a market
Direct search market
Domestic market
Efficiency
Efficient capital market
Efficient market
Efficient market hypothesis
Either way market
Equilibrium market price of risk
Equity market
Eurocurrency loan market
Eurocurrency market
Euroequity market
European open market
Excess return on the market portfolio
External efficiency
External market
Fair market price
Fast market
Federal funds market
Federal open market committee
Financial market
Fixed income market
Flat market
Foreign banking market
Foreign bond market
Foreign equity market
Foreign market
Foreign market beta
Forward market
Fourth market
Futures market
Gray market
Index and option market
Informational efficiency
Inside market
Internal market
Internally efficient market
International equity market
International market
International monetary market
Inverted market
Locked market
Make a market
Mark to market
Marked to market
Market
Market arbitrage
Market book ratio
Market cap or market capitalization
Market capitalization
Market capitalization rate
Market clearing
Market conversion price
Market cycle
Market if touched
Market impact costs
Market maker
Market maker spread
Market model
Market on close
Market on opening
Market order
Market overhang
Market portfolio
Market premium convertible securities
Market price of risk
Market prices
Market return
Market risk
Market risk return function
Market sectors
Market segmentation theory or preferred habitat theory
Market stabilization
Market surveillance
Market timer
Market timing
Market timing costs
Market to book ratio
Market value
Market value ratios
Market value weighted index
Market value weights
Marketplace price efficiency
Marking to market
Matador market
Money market
Money market center bank
Money market certificates
Money market demand account
Money market fund
Money market hedge
Money market mutual funds
Money market notes
National market
New issues market
Normal market
One sided one way market
One way market
Open market operation
Open market purchase operation
Open market share repurchases
Operationally efficient market
Otc market
Over the counter market
Over the counter otc market
Perfect capital market
Perfect market view of capital structure
Perfect market view of dividend policy
Pricing efficiency
Primary market
Ratio of exchange in market price
Real market
Rembrandt market
Samurai market
Secondary market
Security market line
Security market plane
Seller's market
Semi strong form efficiency
Side of the market
Specific issues market
Spot market
Stock market
Strong form efficiency
Technical condition of a market
Thin market
Third market
Tight market
Two sided market
Two way market
Underlying market price
Upstairs market
Weak form efficiency
Yankee market

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