Relate the stock market crashes of 1987 and 2000 to the strong and weak versions of the efficient market hypothesis. Explain the benefits of applying concepts from other social sciences to the behavior of securities prices.

Financial Institutions and Markets: Discussion Board week 5

Interactive activity

Explain the efficient market hypothesis.

• Summarize the evidence for and against the efficient market hypothesis.
• Indicate and justify the optimal investment strategy based on the efficient market hypothesis.
• Relate the stock market crashes of 1987 and 2000 to the strong and weak versions of the efficient market hypothesis.
• Explain the benefits of applying concepts from other social sciences to the behavior of securities prices.

5.2 Action Required:

Watch this short video:

5.3 Test your Knowledge (Question):

Summarize the efficient market hypothesis in your own words.

5.4 Instructions

• Avoid plagiarism, the work should be in your own words
• minimum words 200.