Friday, April 13, 2007
11:28 PM Y
Haven't had my dinner. I'm hungry. I just kept reading and studying, studying and reading for the entire day and occasionally (by that I mean most of the time, gerls don mean what they say!), I will drift off to lala land.
An efficient market is one where price of securities fully reflect all information that is publicly known.
I have to say that 202 is really nice to read and at times, I will go "oh, now I understand" but when I looked at the past year papers, the things I learn and the questions in the exams seem like 2 different things altogether. So what we study does not FULLY REFLECT the types of questions that will come out in the exams. And so in conclusion, efficient market theory doesn't apply in this case! But then, students being students, we still choose to study all the information (including irrelevant ones!) despite knowing that the things we study might not come out in the exams. Is this rational or irrational? You decide. Investors can choose to invest, but we are restrained by the BELL CURVE THEORY and so we are kinda stuck. I am beginning to like the efficient market theory, really interesting! This is my interpretation of efficient market theory, with some twisted logic added in! : )
I just spent 15 minutes typing this entry! Back to Information Perspective! I love (hate) Scotts.
