The efficient markets had been defined as which would efficient in reflecting all relevant information in the perfect financial market.In 1970,the Efficient Market Hypothesis(EMH) was issued and developed by an economist named Eugene Fama. Although there are several researcher make an argument about this hypothesis with an doubtful attitude,it still appear to be significant in today’s capital market.At the same time,some hypothesis of EMH are made a lot of contribution for the capital market such as strong form.This essay set out to explain the characteristics of efficient market and then go on to introduce the efficient market including three versions. Moreover,the essay move to make a point about that the corporate manager will consider market
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Keim(1983) has founded that the annual return of small-company gains one percentage point more than large-company in United States.Nevertheless,for accounting anomalies,maket value of company with low price or earnings ratio will tend to have higher returns.While the prices or sales ratio is low, all the result are prefer to outperform including the phenomenon of high dividend yield.It has been validated that portfolios of smaller stocks tend to generate higher return than those of larger stocks(Fama&French,1993)Similiarly,calendar anomalies indicates that the stock price depends on several especial time such as last trading day of the month.Finally,event anomalies express that price are changes after some special event such as new exchange listings.For example,the more analysts suggest to purchase of a stock,the more possibility it will decline.Consequently,corporate manager may focus on several
Keim(1983) has founded that the annual return of small-company gains one percentage point more than large-company in United States.Nevertheless,for accounting anomalies,maket value of company with low price or earnings ratio will tend to have higher returns.While the prices or sales ratio is low, all the result are prefer to outperform including the phenomenon of high dividend yield.It has been validated that portfolios of smaller stocks tend to generate higher return than those of larger stocks(Fama&French,1993)Similiarly,calendar anomalies indicates that the stock price depends on several especial time such as last trading day of the month.Finally,event anomalies express that price are changes after some special event such as new exchange listings.For example,the more analysts suggest to purchase of a stock,the more possibility it will decline.Consequently,corporate manager may focus on several