Topic

Efficient Capital Markets

Instructions

Assignment Steps

Resources: Microsoft^® Word

Explain in 525 words what it means to have an efficient capital market, including:

Describe the behavioral challenges in achieving efficiency.
Discuss the three forms of market efficiency.
What are the implications to corporate finance?
Would you consider the real estate market an efficient capital market? Please explain why or why not.

Answer Preview

From evidence acquired over the years, the stock market has proven to have high efficacy, which denies investors from attaining high gains from active management strategies (Borges, 2008). These strategies lead to a decrease in returns due to costs arising from management, transactions and taxes among many other factors. And without implementing a more passive investment strategy by investors, leads to the imminent collapse of investments made.

Word Count: 900