Efficient Market Hypothesis Essay Example | Topics and Well Written Essays - 1750 words

Efficient Market Hypothesis - Essay Example On the other hand, the semi-strong form of efficient market hypothesis assumes that the stock prices fully reflect and represent the public information, mentioning and indicating that the fundamental analysis would not bring the yield of superior risk-adjusted returns. The strong-form of efficient market hypothesis is based on the assumption that the prices of securities reflect both private and public information, highlighting and indicating that the investors would be able to earn higher risk-adjusted returns. But, these three forms of efficient market hypothesis have proved some serious limitations. And these serious limitations proved their existence in the year of 1987 when the event of market crash occurred. Is it possible to rationally explain the causes of the market crash of 1987? Is it appropriate to say that markets were efficient enough to represent the prices of stocks in the required way? But, that was not end of it; rather they continued to be part of the finance histo ry. In the year of 1990, the Internet Bubble totally invalidated the rationale behind the use and application of efficient market hypothesis. On the basis of hindsight, it is clearly evident that the equity valuation, which normally heavily depends on the unpredictable and uncertain future predications, was based on irrationality and irrational and unsupportable claims. After that part, its implications in terms of validity and applicability of this theory would be critically accounted for.... In the year of 1990, the Internet Bubble totally invalidated the rationale behind the use and application of efficient market hypothesis. On the basis of hindsight, it is clearly evident that the equity valuation, which normally heavily depends on the unpredictable and uncertain future predications, was based on irrationality and irrational and unsupportable claims. In the subsequent parts of this piece of work, first the concept and theory of efficient market hypothesis would be clearly explained and highlighted. After that part, its implications in terms of validity and applicability of this theory would be critically accounted for. Definition__________________________________________ An efficient capital market is defined as a capital market in which the current price of a share or stock fully and totally represents and reflects all the stock or share related information, including the information of risk (Schweser, 2004). Furthermore, an informationally efficient capital market i s defined as a capital market in which a price of security or stock rapidly and fast adjusts as soon as a new piece of related information is arrived. This piece of definition of an efficient capital market hypothesis is based on certain assumptions, and they are: First, a considerable number of participants, who are there to increase profit or returns on stocks, tend to understand and analyse and and give value to stocks and securities, and these participants are independent of each other. Second, any piece of new information appears in a capital market in a random fashion; and pieces of information are also announced independent of each other with regard to timing as well. Third, securities and stocks investors and fund managers quickly and rapidly start estimating the prices of

Arabic News Channels Essay Example | Topics and Well Written Essays - 1000 words

Arabic News Channels - Essay Example "They're challenging the hegemony of the American media." Al Jazeera broadcasts 24/7, and is becoming increasingly present and important throughout the Arab world. It is Qatar-based and reaches out to over 45 million people that live in Arab nations. It also was the center of controversies during the Iraqi War. The first controversy accused Al Jazeera for broadcasting views of the conflict going on that were very different than media and news stations that resided in the United States (Sharkey, 2003). According to Sharkey (2003, pg. 1),"While U.S. television news media focused on military operations, Al Jazeera was "presenting something of the violence, the effects, the emotion" of the conflict, says Leila Hudson, assistant professor of Near Eastern studies at the University of Arizona, who monitored war news on U.S. and Arab networks. This led to charges by U.S. officials and conservative commentators that Al Jazeera was airing propaganda. Untrue, says Lamis Andoni, a journalist who has worked for print and broadcast media in the Middle East and the United States. Al Jazeera broadcast statements from U.S. government officials, showed the Central Command briefings and had a reporter embedded with U.S. troops, Andoni says. The network showed "a broader picture" of the conflict than U.S. news organizations, she says, because it also showed civilian casualties and the destruction of water, electrical and hospital facilities." Skeptics believe that neither Al Jazeera nor the United States demonstrated an accurate portrayal of the war in Iraq. They failed to analyze it properly, including the causes and reactions to it. People are concerned that Arab satellite stations are too busy broadcasting the prospective of the Iraqis without pretending to be objective, and that this in turn harms their own audience (Sharkey, 2003). According to Sharkey (2003, pg. 1), "Media analysts say television news operations in the Arab world and the United States would never present events or issues from the same perspective, because they are trying to reach audiences with different cultural experiences and frameworks. The fact that Al Jazeera offers "a different perspective than CNN" should not be regarded as a problem, says Mohammed el-Nawawy, a Stonehill College professor who has written about coverage of the Middle East. "Each network is trying to appeal to its audience." U.S. network executives say the different perspectives offered by Al Jazeera and other Arabic-language networks are valuable in their deliberations about how to cover events in the Arab world." News media stations in the United States keep a watch on Al Jazeera 24/7. He says this is done to remind them how other people in the world perceive the same news and stories. Believe it or not, Al Jazeera works with CNN and other United States networks. The same sort of scenario is present in the Arabic world. Footage from both sides could be seen on television for each area of the world. According to Sharkey (2003, pg. 1), "Although U.S. government spokespersons have disparaged Al Jazeera's coverage, it has been an intelligence tool for the United State