There are several concepts of efficiency for a financial market. The most widely discussed is informational or price efficiency, which is a measure of how quickly and completely the price of a single asset reflects available information about the asset's value. Other concepts include functional/operational efficiency, which is inversely related to the costs that investors bear for making transactions, and allocative efficiency, which is a measure of how far a market channels funds from ultimate lenders to ultimate borrowers in such a way that the funds are used in the most productive manner.
Three common types of market efficiency are allocative, operational and informational. However, other kinds of market efficiency are also recognised.
James Tobin identified four efficiency types that could be present in a financial market:
Information arbitrage efficiency
Asset prices fully reflect all of the privately available information (the least demanding requirement for efficient market, since arbitrage includes realizable, risk free transactions)
Arbitrage involves taking advantage of price similarities of financial instruments between 2 or more markets by trading to generate profits.
It involves only risk-free transactions and the information used for trading is obtained at no cost. Therefore, the profit opportunities are not fully exploited, and it can be said that arbitrage is a result of market inefficiency.
This reflects the semi-strong efficiency model.
Fundamental valuation efficiency
Asset prices reflect the expected flows of payments associated with holding the assets (profit forecasts are correct, they attract investors)
Fundamental valuation involves lower risks and less profit opportunities. It refers to the accuracy of the predicted return on the investment.
Financial markets are characterized by predictability and inconsistent misalignments that force the prices to always deviate from their fundamental valuations.
This reflects the weak information efficiency model.
Cette page est générée automatiquement et peut contenir des informations qui ne sont pas correctes, complètes, à jour ou pertinentes par rapport à votre recherche. Il en va de même pour toutes les autres pages de ce site. Veillez à vérifier les informations auprès des sources officielles de l'EPFL.
Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on both sides of a trade". Its concern is thus the interrelation of financial variables, such as share prices, interest rates and exchange rates, as opposed to those concerning the real economy. It has two main areas of focus: asset pricing and corporate finance; the first being the perspective of providers of capital, i.e.
There are several concepts of efficiency for a financial market. The most widely discussed is informational or price efficiency, which is a measure of how quickly and completely the price of a single asset reflects available information about the asset's value. Other concepts include functional/operational efficiency, which is inversely related to the costs that investors bear for making transactions, and allocative efficiency, which is a measure of how far a market channels funds from ultimate lenders to ultimate borrowers in such a way that the funds are used in the most productive manner.
La finance renvoie à un domaine d'activité , aujourd'hui mondialisé, qui consiste à fournir ou trouver l'argent ou les « produits financiers » nécessaire à la réalisation d'une opération économique. La finance permet de faire transiter des capitaux des agents économiques excédentaires (qui disposent d'une épargne à faire fructifier) aux agents économiques déficitaires, qui en ont besoin (pour se financer, croître, etc.) La finance regroupe à la fois le système financier et les opérations financières qui ont lieu dans ce système.
The course provides a market-oriented framework for analyzing the major financial decisions made by firms. It provides an introduction to valuation techniques, investment decisions, asset valuation, f
Plonge dans la révolution des marchés numériques, discutant de la technologie du grand livre distribué, du Bitcoin et de la prise de décision automatisée.
Explore l'hypothèse des marchés efficients dans la finance, en discutant de ses implications, de ses formes, de sa testabilité et des défis du monde réel.
This thesis consists of three chapters on informational frictions in financial markets. The chapters analyze problems related to markets' ability to guide real investment, and what drives liquidity. B
Corporate disclosure is the most important source of information about the firm for the outside investors. While some disclosure of public firms is mandated by regulation, firm managers can provide ex