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Inefficient Stock Markets And Their Implications In The Context Of Extreme Financial Events: A Theoretical Framework

Author

Listed:
  • CRISTI SPULBAR

    (FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION, UNIVERSITY OF CRAIOVA, ROMANIA)

  • ELENA LOREDANA MINEA

    (FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION, UNIVERSITY OF CRAIOVA, ROMANIA)

Abstract

The main objective of this research article is to investigate the concept of inefficient stock markets and their implications in the context of extreme financial events. The presence of correlations in the case of financial asset returns may be caused by a partial incorporation of information which generates a certain predictability of the stock markets behaviour. In other words, this aspect explains the inefficiency of the stock markets. This research paper also examined the impact of investment strategies based on international portfolio diversification. Moreover, in the context of market inefficiency, we analyzed the concept of Adjusted Market Inefficiency Magnitude (AMIM).

Suggested Citation

  • Cristi Spulbar & Elena Loredana Minea, 2022. "Inefficient Stock Markets And Their Implications In The Context Of Extreme Financial Events: A Theoretical Framework," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 38-41, February.
    • Handle: RePEc:cbu:jrnlec:y:2022:v:1:p:38-41
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    References listed on IDEAS

    as
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