Question

use personal point to explain the Mature reflection of the Efficient Markets Hypothesis taking into account the evidence provided during the investment exercise.

Answer 1

MATURING MARKET

Although it's relatively easy to pour cold water on the efficient market hypothesis, its relevance may actually be growing. With the rise of computerized systems to analyze stock investments, trades, and corporations, investments are becoming increasingly automated on the basis of strict mathematical or fundamental analytical methods. Given the right power and speed, some computers can immediately process any and all available information, and even translate such analysis into an immediate trade execution.

Despite the increasing use of computers, most decision-making is still done by human beings and is therefore subject to human error. Even at an institutional level, the use of analytical machines is anything but universal. While the success of stock market investing is based mostly on the skill of individual or institutional investors, people will continually search for the surefire method of achieving greater returns than the market averages.

CONCLUSION

It's safe to say the market is not going to achieve perfect efficiency anytime soon. For greater efficiency to occur, all of these things must happen:

• Universal access to high-speed and advanced systems of pricing analysis.
• A universally accepted analysis system of pricing stocks.
• An absolute absence of human emotion in investment decision-making.
• The willingness of all investors to accept that their returns or losses will be exactly identical to all other market participants.

It is hard to imagine even one of these criteria of market efficiency ever being met.