Finance Theory — 19.1: The Efficient Markets Hypothesis скачать в хорошем качестве

Finance Theory — 19.1: The Efficient Markets Hypothesis

How did the stock market identify the cause of the Challenger disaster within hours—six months before a presidential commission reached the same conclusion? This video explores the Efficient Markets Hypothesis (EMH), the foundational idea that asset prices rapidly aggregate information from millions of participants, and the elegant paradox that keeps the whole system running. Key concepts covered: • The Challenger disaster as a real-world case study in market efficiency — how Morton Thiokol's stock dropped roughly 12% while other contractors fell only 2-3% • The Efficient Markets Hypothesis: how prices incorporate public reports, private knowledge, and expert judgment through trading • Critical nuance: EMH does not claim prices are always correct, only that they cannot be predictably wrong in a way that yields consistent profit • EMH as the foundation of modern finance — supporting CAPM, portfolio optimization, and discounted cash flow valuation • The $100 bill parable and the limits of taking efficiency to its extreme • The Grossman-Stiglitz Paradox (1980): perfectly efficient markets are logically impossible because efficiency disincentivizes the costly information gathering that efficiency requires • The resolution: markets are nearly efficient — a dynamic equilibrium where active managers earn just enough to justify their effort • Practical implications for individual investors: why low-cost index funds capture the market's collective wisdom • The ecosystem of market efficiency — how active participants power the price accuracy that passive investors free-ride on • Why efficiency needs inefficiency to survive, and how that tension drives every price you see ━━━━━━━━━━━━━━━━━━━━━━━━ SOURCE MATERIALS The source materials for this video are from    • Ses 19: Efficient Markets II