Understading market efficiency

6 important questions on Understading market efficiency

Consequence of semi strong ?

Fundamental analysis is of no value?. Trading based on underlying firm fundamentals is of no value

Strong form is unrealistic but what is consequence

That insider info is of no value

Why can markets not be fully efficient.

1. There is no market and little incentive to collect information
2. There is not a market for both market for asset management and assets markets if markets are fully efficient.
3. There are a lot of evidence against market efficiency. - twin stocks, also etf or close end funds under nav - bonds that totally new and on the run have a little spread.  - covered inerest rate parity violations, exchange rate and interest -
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Robbert shiller what does he tell us?

Investors can be irrational, assets can develop into bubbles, prediction of prices in mid to long run is possible, he analyzed the deviations of the fundementals. And explain that stock prices move way more than theory can explain

Are  Inefficient markets realistic?

No, if that was true making money by buying low and selling high would be very easy. And even professional managers hardly beat the market on average. There is also free entry of capital and managers

Markets are efficiently inefficient? Explain

Must be inefficient enough that active investors are compensated for their costs, and efficient enough to discourage additional active investing.

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