1 EFFICIENT MARKETS HYPOTHESIS Andrew W. Lo To appear in L. Blume and S. Durlauf, The New Palgrave: A Dictionary of Economics, Second Edition, 2007. New York: Palgrave McMillan. The efficient markets hypothesis (EMH) maintains that market prices fully reflect all available information. Developed independently by Paul A. Samuelson and Eugene F. Fama in the 1960s, this idea has been applied extensively to theoretical models and empirical studies of financial securities prices, generating considerable
Words: 11295 - Pages: 46
multinational companies any more. What is more, in accordance with the data from WTO, the increase of multinational trade is becoming more and more dramatically in comparison with the global output. (Liu, 2005) As a result, it is suggested that current economic system is transferred to be more globalised, integrated and interdependent. Thus for many enterprises or just like your company Lenovo, to have a plan on the international expansion strategies is of the essence. 2. Motives of international expansion
Words: 4848 - Pages: 20
Africa. It discusses the role of small businesses in creating jobs, developing of new products and new markets, the flexibility of small businesses to changing markets as well as their aggregate taxes. Promoting small businesses makes sense as an economic development strategy, but with some qualifications. Small businesses are potent job creators, but so are large businesses. The attribution of the bulk of net job creation to small businesses arises largely from relatively large job losses in large
Words: 2291 - Pages: 10
financial activities closely with the economy, the scope of financial activities, quality directly affects the performance of economic activity, almost all financial activities are central to financial intermediaries for the start, therefore, economic activity in financial intermediation occupies a very important position. With the degree of economic and financial deepening and economic globalization, the rapid advance, the financial intermediary itself a very complex system, and the system operating conditions
Words: 2554 - Pages: 11
PART I - INTRODUCTION Chapter 1 Introduction and Goals of the Firm Managerial economics is that part of economics applied to the decisions that managers must make. When managers make decisions that maximize firm profits, they simultaneously maximize shareholder wealth and promote efficient allocation of resources. Managers drift away from this objective when they concentrate on their own security. To avoid non-profit maximizing behavior, a growing number of firms are structuring compensation
Words: 4420 - Pages: 18
[1] What will happen according to the law of diminishing marginal utility upon acquiring an additional unit of a product? Consumer satisfaction declines. The law of diminishing marginal utility is at the heart of the explanation of numerous economic phenomena, including time preference and the value of goods... The law says, first, that the marginal utility of each (homogenous) unit decreases as the supply of units increases (and vice versa); second, that the marginal utility of a larger-sized
Words: 2228 - Pages: 9
financial liberalization Title: China’s financial liberalization and the policy transformation towards openness Author: Xuepan Cheng 4136801 Abstract This paper focused on the research of China’s financial liberalization reform in order to discuss the economic and financial effects casted by financial liberation. Also the article pointed out the current problems of China’s financial system and provided suggestions for implementation. The main argument of policy suggestions for China is to further lower
Words: 2952 - Pages: 12
with increasing globalization and also the saturation of the job market due to the recent downturn in the various economies of the world. Developed and developing countries put emphases on a more human capital development towards accelerating the economic growth by devoting necessary time and efforts. Thus human capital development is one of the fundamental solutions to enter the international arena.
Words: 534 - Pages: 3
Recommendation ------------- 9 4. References ------------ 10 INTRODUCTION Pearce and Robinson (1991) have defined strategic management as “the set of decisions and actions that result in the formulation and implementation of plans designs to achieve a company’s objective. Ghana is the potential market identified because the Government is committed to implementing policies that
Words: 2872 - Pages: 12
information. Now that Guillermo Furniture has stiff competition, Mr. Navallez must focus on the competitive economic advantage of his company. “A company’s competitive advantage largely determines its ability to generate excess returns on capital and links the business strategy with fundamental finance and capital markets” (Greenwald and Kahn, 2007). Thinking about a competitive economic advantage, Guillermo has many things to consider. He needs to think about how to generate more revenue, which
Words: 750 - Pages: 3
