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The Concept of Efficient Capital Market

Author

Listed:
  • Vlad Costică

    ("Ovidius" University of Constanta)

Abstract

The efficient market capital was defined in 1939 by the American economist Eugene Famma which started from the fact that the information, which is essential for determining the price of a financial asset, has an asymmetric distribution in the market, and therefore there are different decisions sale / purchase of one and the same security title. The asymmetric information distorts the value by later incorporating it in the price. A price that does not reflect accurately the characteristics of the issuer has the effect of reducing the expected real return of the seller or buyer. The only factor that should affect future expectations is the investor's attitude towards risk.

Suggested Citation

  • Vlad Costică, 2017. "The Concept of Efficient Capital Market," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 703-708, December.
    • Handle: RePEc:ovi:oviste:v:xvii:y:2017:i:2:p:703-708
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    More about this item

    Keywords

    efficient market; the symmetry of information; the independence of exchange rates; lack of transaction costs;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G01 - Financial Economics - - General - - - Financial Crises

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