Market efficiency is an important assumption for both financial investors and non-financial firms which rely...
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Finance
- Market efficiency is an important assumption for both financial investors and non-financial firms which rely on market price as a signal for investment and/or financing decisions. The following diagram shows the reaction of a stock market index to a positive news. Based on this piece of evidence alone, can we conclude that this market is efficient in incorporating all available information? Explain your answer with reference to the relevant theory. (Hint: explain the concept of market efficiency; list the characteristics of market efficiency; conclude)
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