Efficient Capital Markets: A Review of Theory and Empirical Work*

Malkiel, Burton G.; Fama, Eugene F.

doi:10.1111/j.1540-6261.1970.tb00518.x

Cited by 4,375 publications

(603 citation statements)

References 33 publications

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“…According to [1] definition: "'on efficient market, asset price is a good indicator of its intrinsic value"", and "'on efficient market, competition will manage in such a way that in the average all new information on intrinsic asset value will be instantaneously reflected in the price'', considered as evidences in his time. On Dec. 1996, during Internet bubble, director of FED A. Greenspan alluded to "irrational exuberance" in an official talk.…”

Section: Introductionmentioning

confidence: 99%

Effect of Behavioral Finance on Gold Price Trend

Ruel¹,

Francois²,

Grauffel³

et al. 2013

IJTEF

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Abstract-Since the 60's, the Efficient Market Hypothesis (EMH) is under question. From recent events, particularly related to the 2008 Financial Crisis, financial assets appear as uncorrelated with their fundamentals and their prices are subject to strong fluctuations. In this context, including behavioral finance in financial system dynamics could be a response. On a more limited scope, the goal of present project is to establish a modeling process of gold price trend based on 1980 Grossman-Stiglitz model by integrating behavioral component for a better representation of markets reality. The modeling process is based on simulations and the article presents selected cognitive biases. The analysis of the results, and the corrections that followed, lead to the formulation of a mathematical model. Thus, the impact of cognitive biases on dynamics of gold price formation is demonstrated, and evaluated through their influence on informed (rational and irrational) and uninformed investors. The result of this study suggests that behavioral finance has a crucial part in gold price formation.

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Section: Introductionmentioning

confidence: 99%

Effect of Behavioral Finance on Gold Price Trend

Ruel¹,

Francois²,

Grauffel³

et al. 2013

IJTEF

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“…With the JSE being only semi-strong form efficient, the initial adjustment to the share price was imperfect (cf. Malkiel & Fama, 1970) and was revised over the six days following the event, leading to a reduction in cumulative abnormal returns (Table 1).…”

Section: Discussionmentioning

confidence: 99%

“…Malkiel & Fama, 1970;Brealey, Myers & Allen, 2008). The Marikana incident may also have been indicative of labour relation problems in the platinum and South African mining sector as a whole (cf.…”

Section: Corporate Social Responsibility Event Methodsologies and Marmentioning

confidence: 99%

Assessing the potential impact of the Marikana incident on South African mining companies : an event method study

Hill

Maroun

2015

S. Afr. j. econ. manag. sci. (Online)

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This study examines the potential impact of industrial unrest and the outbreak of violence at Marikana on 16 August 2012 on the share prices of mining companies listed on the Johannesburg Stock Exchange (JSE) using an event methodology. Contrary to expectations, the Marikana incident does not appear to have had a widespread and prolonged effect on the South African mining sector. This may be the result of the strike action already having been discounted into the price of mining shares, implying that the market was only reacting to the unusually violent (but short-lived) protest. Alternately, the results could be indicative of investor confidence in the corporate social responsibility initiatives of the South African mining industry as a whole.This paper is the first to examine the potential impact of the Marikana incident on the share prices of mining companies listed on the JSE. It should be of interest to both academics and practitioners wanting to understand how share prices react to exogenous events. It is also relevant for corporate-governance researchers concerned with the relevance of social and governance practices in a South African setting. This research is faced with the limitations associated with most statistical research: that causality cannot be ascribed to tested relationships. Notwithstanding these limitations, it is argued that these findings are important, given the significant coverage of the Marikana incident and the ongoing debate on the need for corporate social responsibility.

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“…Knowing how to weigh associated risk and expected returns from an investment helps an investor to make a well-informed investment decision making. It is also a condition that satisfies the characteristics of an efficient market [15]. Although findings of market efficiency are mixed, they do not diminish the importance of investors having good understanding about the relationship between risk and return.…”

Section: Antecedent Variablesmentioning

confidence: 99%

FinancialLiteracyand Satisfaction in Malaysia: A Pilot Study

Ali¹,

Rahman²,

Bakar³

2013

IJTEF

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Abstract-This paper reports the results of a pilot study examining the factors that contribute to the level of financial literacy among selected Malaysian public and its relationship with financial satisfaction. Among pre-identified antecedents of financial literacy, financial planning was found to exhibit the strongest effect on the literacy level. The literacy level then explains reliably the level of financial satisfaction among the 199 respondents selected for the study.The actual study intends to collect at least 100 responses from each of the 14 states in Malaysia. From the pilot study's results, we are convinced with the viability of the existing model, though a few modifications are suggested and discussed further together with the implications of these findings at the end of this paper.

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Efficient Capital Markets: A Review of Theory and Empirical Work*

Cited by 4,375 publications

References 33 publications

Effect of Behavioral Finance on Gold Price Trend

Effect of Behavioral Finance on Gold Price Trend

Assessing the potential impact of the Marikana incident on South African mining companies : an event method study

FinancialLiteracyand Satisfaction in Malaysia: A Pilot Study

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