The Concept of Efficient Capital Market

Vlad Costică ()
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Vlad Costică: "Ovidius" University of Constanta

Ovidius University Annals, Economic Sciences Series, 2017, vol. XVII, issue 2, 703-708

Abstract: The efficient market capital was defined in 1939 by the American economist Eugene Famma which started from the fact that the information, which is essential for determining the price of a financial asset, has an asymmetric distribution in the market, and therefore there are different decisions sale / purchase of one and the same security title. The asymmetric information distorts the value by later incorporating it in the price. A price that does not reflect accurately the characteristics of the issuer has the effect of reducing the expected real return of the seller or buyer. The only factor that should affect future expectations is the investor's attitude towards risk.

Keywords: efficient market; the symmetry of information; the independence of exchange rates; lack of transaction costs (search for similar items in EconPapers)
JEL-codes: F30 G01 (search for similar items in EconPapers)
Date: 2017
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