which one is least accurate about perfectly efficient pricing?
restrictions on short sales cause overvalued stocks to be relatively more common than undervalued stocks
arbitrage trading is characterized by too much capital chasing too few pricing inefficiencies, limiting the ability of arbitrage to bring about fully efficient prices
the returns to trading strategies based on analysis of new information must be sufficient to compensate for the time and effort required to analyze new information
they all sound so right...作者: MonkeyBusiness 时间: 2011-7-11 18:40
i'd go with
arbitrage trading is characterized by too much capital chasing too few pricing inefficiencies, limiting the ability of arbitrage to bring about fully efficient prices
as too much capital chases pricing inefficiencies, all potential arbitrage transactions would end up being executed thus leading to efficient prices
any trading restrictions (e.g. short sales) would hinder price discovery
the last statement is obviously accurate作者: thisisbrianly 时间: 2011-7-11 18:40
bingo.
thanks for the clear explanation.作者: waldziuchna 时间: 2011-7-11 18:40
offtopic
If you refer to "breakeven" the BA TI calculator can get the breakeven according to the manual.
Edited 1 time(s). Last edit at Wednesday, November 3, 2010 at 08:58PM by economicz.
