The Effect of Efficiency on Stock Market Financial Essay
Jack Bogle, in his 'cost business' hypothesis, argued for a similar 'arithmetic' to explain that gross returns in the financial sector are Market Efficiency: Effects and Anomalies. By means of. Mary Hall. Updated. Rated by. Thomas Brock. Fact checked by. Ryan Eichler; This study examines the empirical research through the chosen methodology, application and comparison of conclusions to summarize the effects of the crisis on the efficiency of the financial markets. There are three principles for the efficient market hypothesis: the weak, the semi-strong and the strong. The weak assume that current stock prices, market efficiency refers to how well current prices reflect all available, relevant information about the true value of the underlying assets. A truly efficient market eliminates the. This paper tests market efficiency by studying the impact of the global financial crisis and the recent Chinese crisis on stock market efficiency in China's emerging stock markets. This study examines the effect of financial news on the volatility of Taiwan's stock market. The news sources come from two leading media databases in Taiwan. We adopt the linguistic analysis process of the patented “Methods for Sentimental Analysis of News Text” Lu et al. 2014 to quantify financial news. The development of capital markets changes the relevance and empirical validity of the efficient market hypothesis. The dynamics of the capital markets determine the need for efficiency. The dissertation consists of three empirical essays on corporate finance. In the first essay, we examine the impact of cash flow volatility on firms' use of debt maturity and zero-leverage policies in an international context. Using a large international sample, we find that cash flow volatility is positively related to our measure of debt.