Forms of Information Efficiency of the Financial Market

Krasnova Iryna V. ()
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Krasnova Iryna V.: Kyiv National Economic University named after. V. Getman

Business Inform, 2014, issue 3, 130_135

Abstract: The goal of the article lies in the study of forms of efficient information support of functioning of the financial market. Analysing, systemising and generalising scientific works of many scientists, the article considers the financial market as a system phenomenon. The article offers, by analogy with technical sciences, a market model that consists of the servicing system (in the form of information) and support system (waiting of participants), combination of which makes the management system. Information in this model is the main driving force: it is at the inlet of the system, is transformed into participants waiting inside the system, and arrives to the outlet as the price of the financial asset. This movement is continuous and, consequently, market efficiency depends on information and degree of its perception by the market. The article characterises three hypotheses about forms of market efficiency, identifies their advantages and shortcomings from the position of fundamental and technical analysis, and provides a practical example of assessment of information in the quasi-strong form of information efficiency of the market. The article identifies the reasons, pursuant to which, while market participants have similar information, each might or might not obtain income from its use. The prospect of further studies in this direction is identification of the degree of information efficiency of the domestic market, volume, quality and needs in a certain range of information, which influences price formation of financial assets that circulate in the market.

Keywords: information; financial market; efficient market; forms of efficiency; information efficiency; financial asset (search for similar items in EconPapers)
Date: 2014
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