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No, it won‘t. 1) You‘d still get a risk premium, because only known information can be priced into the stock. Unkown information is risk. 2) Capital is rare.
by JanSt 7y ago
No, it won‘t.
1) You‘d still get a risk premium, because only known information can be priced into the stock. Unkown information is risk.
2) Capital is rare. There is no unlimited supply, so it‘s distributed between assets as well as available information allows. But there is still unsatisfied capital needs where the money can be employed more efficient than holding it cash.
- ddxxdd 7y agoSo an investor that can anticipate an increase in, decrease in, or general level of a) market risk, b) a market's risk premium, or c) available market capital, can predict market movements. Just because CFAs use fancy names for market imperfections doesn't mean that they're not exceptions to the EMH.