What are some of the more important disagreements between the efficient market hypothesis and the findings of behavioral finance?
What will be an ideal response?
Answer: For a market to be efficient, investors must react in a rational manner and respond promptly to market events. If investors base their decisions on misperceptions caused by overconfidence or emotional factors such as loss aversion, rather than objective information, they may either overreact or under react, and markets will not be as efficient as the EMH makes them out to be.
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"Should people be allowed to protect themselves from harm by using mace as self-defense?" is an example of a(n) ________ question
A) leading B) loaded C) double-barreled D) overstated E) screening
A risk manager is concerned with which of the following? I. Identifying potential losses II. Selecting the appropriate techniques for treating loss exposures
A) I only B) II only C) both I and II D) neither I nor II