The purpose of this assignment is to allow the student an opportunity to explain what it...

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Finance

The purpose of this assignment is to allow the student anopportunity to explain what it means to have an efficient capitalmarket. Students will gain an understanding of the different levelsof market efficiency and how behavioral finance can inhibitreaching market transparency.
Explain in 525 words what it means to haveefficient capital market, including:
Describe the behavioral challenges in achievingefficiency.
Discuss the three forms of market efficiency.
What are the implications to corporate finance?
Would you consider the real estate market an efficient capitalmarket? Please explain why or why not.

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Efficient Capital Market Market efficiency is always related with market information So in market information if its flow properly then it will reflect in market price movements There are three degrees of market efficiency 1 Weak form When historical price movement is not reflect in present and future price movement of any stocks That means available information is not fully equipped which can be reflect the price of the future In this scenario excess returns can be possible through fundamental analysis Security prices reflect all information found in past prices and volume Often weakform efficiency is represented as Pt Pt1 Expected return random error t Since stock prices only respond to new information See Answer

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