Capital Market Research : How Disclosures Of Particular Information Influences Aggregate Trading Activities Taken By Individuals Participating Within Capital

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This essay aims to further identify and expatiate my knowledge on capital market research which investigates how disclosures of particular information influences aggregate trading activities taken by individuals participating within capital markets (Deegan ,2011). Through this module my understanding in capital market research that looks at the information content of accounting disclosures and capital market research that uses share price data as a benchmark for evaluating accounting disclosures has evolved. In this area of research, markets are deemed efficient and this theory will be explored further. The capital market is considered to be highly competitive, and as a result, newly released public information is expected to be quickly impounded into share prices.
Following Fama’s (1970) landmark research papers, which explained the principals of the efficient market hypothesis, capital market efficiency has been a pre-eminent and ongoing research topic. Capital market research ‘explores the role of accounting and other financial information in equity markets.’The assumptions of market efficiency are central to capital market research. Market efficiency is considered important because if information is not assimilated into stock market rapidly of if new information appears in an anticipated manner, individuals may exploit this information.‘A market in which prices always fully reflect all available information is called efficient’ (Fama,1970:383). Markets are not

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