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Financial mkts

Financial Markets Notes
Course

Accounting and finance

88 Documents
Students shared 88 documents in this course
Academic year: 2019/2020
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Nyakashaiaja kenneth
Kyambogo University
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Efficient market hypothesis is the description of how prices respond to the new information in a competitive market. The security prices adjust rapidly to the arrival of new information in the market and therefore security prices represent all the information available in a given securities The weak form. It assumes that stock prices reflect all the available information including historical sequence of prices, rate of returns, trading volume. Under this form, the technical analysts are of no use since they use historical data to analyze and value securities. The semi- strong form. It assumes that security prices adjust rapidly to release public information .It encompasses both historical sequence and public information .In a semi strong form, the fundamental analyst are of no use since they use public financial ratios to analyses securities. The strong form. It assumes that the current stock prices represent both public and private information. This means that no group of investors has monopolistic access to information relevant to information of prices and thus no group trade above average profits. The implication of this is that even the insider trading is of no use, it encompasses both the weak form and the strong form.

(b) Financial analyst. This is a person who makes recommendations for an organization based on analyses and carry out on factors like market trends, the financial status of companies and the predicted outcomes of a certain type of deal. Insider trading. This is the buying or selling of a security by someone who has access to material nonpublic information about the security. Insider trading can be illegal or legal depending on when the insider makes trade. Technical analyst. Technical analyst or technician is a security researcher who analyses investment based on past market prices and technical indicators. Technicians believe that short term price movements are the result of supply and demand forces in the market for a given security.

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Financial mkts

Course: Accounting and finance

88 Documents
Students shared 88 documents in this course

University: Kyambogo University

Was this document helpful?
Efficient market hypothesis is the description of how prices respond to the new
information in a competitive market. The security prices adjust rapidly to the
arrival of new information in the market and therefore security prices represent
all the information available in a given securities
The weak form.
It assumes that stock prices reflect all the available information including
historical sequence of prices, rate of returns, trading volume. Under this form, the
technical analysts are of no use since they use historical data to analyze and value
securities.
The semi- strong form.
It assumes that security prices adjust rapidly to release public information .It
encompasses both historical sequence and public information .In a semi strong
form, the fundamental analyst are of no use since they use public financial ratios
to analyses securities.
The strong form.
It assumes that the current stock prices represent both public and
private information. This means that no group of investors has monopolistic
access to information relevant to information of prices and thus no group trade
above average profits. The implication of this is that even the insider trading is of
no use, it encompasses both the weak form and the strong form.

Students also viewed

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