Fama

Fama recent studies seem to conjure up market inefficiency–specifically, long-run downstairs reaction or overreaction to information. It is time to ask whether this literature, viewed as a whole, in fact suggests that efficiency should be discarded. My reception is a solid no, for two reasons. First, an efficient market generates categories of events that on an individual basis suggest that prices overreact to information. But in an efficient market, unmixed downstairs reaction will be about as shit as overreaction.

If anomalies split randomly between under- and overreaction, they atomic number 18 accordant with market efficiency. It turns out that identified anomalies fall in a roughly even split between ostensible overreaction and under reaction. Second, and more important, we find that the long-term return anomalies are polished to methodology. They tend to become marginal or go away when undecided to different models for expected (normal) returns or when different statistical approaches a...If you exigency to get a full essay, order it on our website: BestEssayCheap.com

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