Efficient Market Hypothesis In Pakistan: Comparing Other Countries' Markets With Pakistan

5696 words - 23 pages

IQRA University (IU) Efficient Markets
Abstracts"What looks like a small project turns into a big project. What looks like a big project turns into a small project. So I don't think there's been a lot of planning involved. At least in my case, there hasn't been." [Eugene Fama for his work on Efficient Market Hypothesis]The purpose of this report is to study and analyze that how effective "Efficient Market Hypothesis" can be implemented in capital markets.This report describes the basic concept of market efficiency and efficient market hypothesis and their implications.Other parts of report include the, forms of EMH along with their limitation including concept of risk, arbitrage and time ...view middle of the document...

[Andrew W. Loy]This report attains to ascertain the reasoning behind and the implications of the efficient market hypothesis in the world's capital markets.The Efficient Market HypothesisThe efficient market hypothesis (EMH) has implication for investors and for firms.Because information is reflected in prices immediately, investors should only expect to obtain a normal rate of return. Awareness of information when it is released does and investor no good. The price adjusts before the investor has time to trade on it.Firms should expect to receive the fair value for securities that sell. Fair means that the price they receive for the securities they issue is the present value. Thus, valuable financing opportunities that arise from fooling investors are unavailable in the market.[Ross/Westerfield/Jaffe (1999)]This mechanism suggests that the market "prices in" the performance data that is already available about a stock.Definition of Market EfficiencyThe concept of efficiency is one regarding the incorporation of information into security prices, that any available information which could influence a company's stock performance should already be reflected in said company's stock price. In an efficient market, therefore, security prices should equal the security's investment value, where investment value is the discounted value of the security's future cash flows as estimated by knowledgeable and capable analysts. [Reem Heakal]A good description of market efficiency and the underlying mechanics is the one by Cootner (1964):"If any substantial group of buyers thought prices were too low, their buying would force up the prices. The reverse would be true for sellers. Except for appreciation due to earnings retention, the conditional expectation of tomorrow's price, given today's price, is today's price.In such a world, the only price changes that would occur are those that result from new information. Since there is no reason to expect that information to be non-random in appearance, the period-to-period price changes of a stock should be random movements, statistically independent of one another."In a perfect market, these criteria are obviously fulfilled. The sufficient conditions in a market where a) there are no transactions costs, b) all relevant information is costlessly available to all market participants, c) all agree on the implications of current information for the current price and distributions of the future price of each security, the current price of a security should "fully reflect" all available information. [Fama (1970)]Three Forms of Market EfficiencyIn economic and financial theory a distinction is made between three forms of market efficiency. The basis of this separation is what is meant by the term "all available information". Each stronger form of efficiency incorporates all weaker forms of efficiency. [Fama 1970]In weak-form efficient markets stock prices reflect market trading data and information derived from it. Examples...

Other Essays On Efficient Market Hypothesis In Pakistan: Comparing Other Countries' Markets With Pakistan

Comparing relationships with mothers in two novels - English Literature - Essay

2314 words - 10 pages Sam Graham Compare how relationships with mothers are presented in ‘On Her Blindness’ and one other poem from the collection. For this essay I will be comparing ‘On Her Blindness’ by Adam Thorpe, to ‘Effects’ by Alan Jenkins; exploring the emotional and physical portrayals of the relationships between the narrator and their mothers. At the beginning of the poem ‘Effects’ Jenkins instantly uses violent, visual imagery to abruptly introduce the

Other with a descriptive nature in studying nude body art - NonWestern Art History - Essay

520 words - 3 pages Knife crime offenders to wear GPS tracking tags By Rob Picheta, CNN Posted at 4:45 AM ET, Mon February 11, 2019 London's homicide rates have increased in recent years. A forensic tent covers the scene where a 20- year-old man was fatally stabbed in April 2018. London (CNN) — Knife crime o?enders in London will be tagged with GPS tracking devices after leaving prison, the city's mayor, Sadiq Khan, said Monday, as the UK capital attempts to curb

Juvenile And Adult Courts – A Comparative Analysis Write A 1,000- To 1,500-Word Paper Comparing And Contrasting Juvenile Court With Adult Court. Include The Following In Your Paper:

1163 words - 5 pages imprisonment or institutionalization. Juveniles beyond rehabilitation are more likely dealt with by adult courts. The juvenile justice system will bring many changes. An increase in the population would require more of a demand for judges, courthouses, and probation officers. Society must deal with the consequences of people who continue to commit crimes. Parents must take accountability for their children's actions. Parents must be

Remitly case study. Design a Go to marketing strategy - Marketing - Go to Marketing Strtegy

1084 words - 5 pages data and knowing more about the consumer behavior we can start creating insights and start forming a new database. After all this, we are good enough to identify that there is a market that exists and there is a room of improvement in the process and we can go forward with starting our service as we have our audience identified. Stage 3: Finding Partners in Pakistan Now that we have somewhat identified our target audience and see a potential market

Adversity in I know why the Caged Bird Sings - I.S.62, 702 - Essay

405 words - 2 pages Located in the continent of Asia, is Pakistan. The population in Pakistan is 190,291,129. The year of independence of Pakistan was in 1947. The capital of Pakistan is Islamabad (Is-lam-a-baad). The neighboring countries of Pakistan are Iran, India, China, and Afghanistan. Henna Henna is a temporary tattoo. Henna is made by henna leaves which are dried into a fine powder. That powder can be used to dye hair or skin temporarily. Most henna come in

Pakistani culture and how it works - class - essay

1046 words - 5 pages inherit through generations. Different countries have different culture and beliefs which help its people to live life according to its principles. In this way Pakistani culture has its special sense of taste as it is very diverse, and it is and ideological Islamic state. Its very existence is due to Islam so, Pakistani culture is primarily based on Islamic way. All other elements of culture are inspired by Islam, but there is also a mixture of

Brandinf

6830 words - 28 pages ."3.2 Pepsi Pakistan3.2.1 HistoryThe market in Pakistan is surely dominated by Pepsi. It has proven itself to be the No.1 soft drink in Pakistan. Now days Pepsi is recognized as Pakistan's National drink. In 1971, first plant of Pepsi was constructed in Multan, and from there after Pepsi is going higher and higher. Pepsi is the choice soft drink of every one. It is consumed by all age groups because of its distinctive taste. Compared with other

Analaysis of the poem "Presents from my aunts" - Year 9 - Essay

828 words - 4 pages time the question begs - will she eventually wear this salwar kameez? Will it lie for years in her wardrobe before she dare gets it out and shows it off in public? After all, there is much psychology behind the clothes we choose or choose not to wear. More Analysis of Presents From My Aunts in Pakistan Presents From My Aunts in Pakistan is a free verse poem of seven stanzas with a total of 68 lines. There is no set rhyme scheme or metrical pattern

Nike - Social And Ethical Issues

641 words - 3 pages , equipment and accessory products for the sports and athletic market. It is the largest seller of such garments in the world. It sells to approximately 19,000 retail accounts in the US, and then in approximately 140 countries around the world. Just about all of its products are manufactured by independent contractors with footwear products in particular being manufactured in developing countries. The company manufactures in China, Taiwan, Korea

Script for Kashmir - Script for a video I made for History - History 20 - Script

474 words - 2 pages signing a stand-still agreement with Pakistan and sending a similar agreement to India, which favored continuing peaceful discussions. In October 1947, Singh’s hopes of remaining independent were quickly shattered. Disturbed by new violence occurring between Muslims and Hindus, the Maharaja fled to India and appealed for military assistance. India’s governor general however, contended that it would be far too dangerous to send troops to a neutral state

How Pakistan's National Identity has been infringed upon via religious conflicts between sunni and shia muslims

492 words - 2 pages Pakistan's National IdentityFounded for religious purposes in 1946, Pakistan is a relatively new country that has grown very quickly. Pakistan's national identity has been undermined by the separatist religious factions of the Shi'iah and Sunni Muslim clans and enhanced by the use of madrasas, schools that teach and support Sunni Islam. Jinna, who was the father of Pakistan , wanted a state in which all religions were tolerated and to

Similar Papers

Market Analysis Of Branded Rice Market, Pakistan

6825 words - 28 pages and wheat in Pakistan - the fastest growing rice producing country in Asia. Unlike other South and South Asian countries, it is not considered as a subsistence crop in Pakistan. Rice accounts for 5.5 per cent of value added in agriculture and 1.1 per cent in GDP. It is a highly cherished crop and is the second largest export commodity of the country after textiles. Its export share has risen from 6.6 per cent in the year 2006-07 to 7.1 per cent

Nuclear Crisis In Pakistan And Iran

320 words - 2 pages Weapons of Mass Destruction in the Middle EastWeapons of mass destruction in the Middle East have been a constantly growing problem. As more countries are achieving weapons of mass destruction, those countries become a threat to not only other countries that have already attained weapons of mass destruction, but even more of a threat to those who haven't. In the Middle East countries have been fighting to achieve weapons of mass destruction for

Economic Inequality Poverty And Economic Development In Pakistan Associate Degree Social Studies Assign Economic In Equality Ment

1393 words - 6 pages 2011, up from 18.6% in 1999, but still very low compared to other developing countries with similar income per capita. Gender parity in education is slowly being achieved, though in Balochistan, parity in primary and secondary education fell between 2002 to 2012. At the start of 2015, Pakistan is not on track to attain the Millennium Development Goal for gender parity in education. Moreover, even if improvements in women’s access to education

The Drinking Age: And How It Is Similar Or Different In Other Countries History 1301 Research Paper

545 words - 3 pages attain a degree in history, he has a degree in English Literature from Yale and has written several other historical non-fiction books including Truman and John Adams, which have all been adapted to films. With an extraordinary writing skill, McCollough tells history like a children’s book. The book starts out with a few quotes from “General George Washington”. McCollough quotes Washington, “Perseverance and spirit have done wonders in all ages