Swot Analysis : Stock Market

5039 Words Jul 30th, 2015 21 Pages
During last two decades, significance of stock market’s role in the progress of economy is being realized in many underdeveloped countries. Stock markets are now considered as one of the most important leading indicator of any economy. In developing economies stock markets are getting momentum as reliable and profitable investment opportunity for investors. Stock market efficiency is an important concept, both in terms of an understanding of the working of capital markets and in their performance and contribution of the development of a country’s economy. If the stock market is efficient, the prices will represent the intrinsic values of the stocks and in turn, the scarce savings will be automatically allocated to productive investments in a way that benefits both investors and the country economy.
The efficient markets hypothesis (EMH), popularly known as the Random Walk Theory, is the proposition that current stock prices fully reflect available information about the value of the firm, and there is no way to earn excess profits, (more than the market overall), by using this information. It deals with one of the most fundamental and exciting issues in finance –why prices change in security markets and how those changes take place. It has very important implications for investors as well as for financial managers (Jonathan Clarke).
The efficient markets hypothesis (EMH) suggests that profiting from predicting price movements is very difficult and unlikely. The main engine…
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