Corporate finance Research Paper Example | Topics and Well Written Essays - 1500 words

Corporate finance - Research Paper Example Here in this paper a critical analysis will be done on whether the financial markets are efficient or not. Different theories will be discussed for further analysis. Additionally future probabilities of global financial crisis will also be discussed. It will be done on a step by step basis. According to the theory of Eugene Fama, markets efficiencies are totally dependent upon information. The hypothesis has mainly three versions. Those versions are Strong, Semi Strong and Weak. Strong form of EMH comments that prices reflect all available public information and also hidden information. Semi strong of EMH states that prices reveal only existing and changing publicly available information. Weak version of EMH tells that prices of traded assets show only publicly available information (Quiry, Fur, Salvi, Dallochio and Vernimmen, 2011). The efficient market hypothesis considers that every investor take all present information in the same manner. This consideration faces lots of oppositions, as stock valuation have some difficulties with this assumption. It is often being noticed that some investors are interested in undervalued stocks and some investors are interested towards growth potentials. It shows that there are huge differences between the ways of thinking of two i nvestors. It is clearly against the theoretical foundations of EMH theory (Ferran and Ho, 2014). It also indicates that with the help of this model ascertaining the worth of stock is impossible under efficient market. As far the efficient market hypothesis, no investor is ever able to gain greater profitability in compared to others, through the equal amount of already invested funds. It further clarifies that equal ownership of information means investors can only achieve same returns. But this assumption is also not true in different cases as there are very wide ranges of returns. It

Economic Report Essay Example | Topics and Well Written Essays - 1750 words - 1

Economic Report - Essay Example Percent Change in real GDP: As is evident from the description of the GDP figures, the percentage changes in real GDP during the period happened to be in proportion. In 1982 the negative growth of GDP indicates towards some serious issues in the domestic economic environment. But thereafter, the growth percentage has been consistent and positive. Year 1984 saw the maximum increase in percentage terms. Civilian Unemployment Rate: The year 1982 is once again seen as the problematic year for the country with the overall unemployment rate rising to 9.7 percent, the highest during the tenure. The gradual decline of the unemployment rate in later years during the tenure points towards the people friendly policies taken up by the government of Ronald Reagan. Civilian Unemployment Rate by Demographic Characteristics: Dividing the unemployment rate demographically, we find that that the Black population seems to be the worst affected. The situation is particularly severe in the age groups of young black community (16-19 yrs). Though it improves somewhat after that, but still things remain worrying for community. Consumer Price Index: The CPI did not see major shakeup during the tenure of President Ronald Reagan. The index saw a consistent rise from 1981 to 1989. The index seems to have spread well over different items, with goods and services forming the major component flaring up the consumer price index. Starting with the overall consumer price index of 90.6 in 1981, the country saw the index rising to 124 by the year 1989. Changes in Consumer Price Indexes for commodities and services: During the entire tenure of President Reagan, except the year 1986, the CPI rates of growth were very high. During this year the energy consumption seems to be one of the lowest actually, with negative growth of 19.7. George H.W. Bush (1989-1993): The tenure of Bush senior too remained quite eventful in the sense that the world saw major