Shiller-Malkien

Question 1

What is EMH?

Answer 1

New information is reflected in the market.

prices in the stock market are fair

Question 2

3 Schools against EMH

Answer 2

1. Momentum investing: certain price patterns persist
2. Behavioural: psychological guidance
3. Fundamental analysis: certain valuation ratios predict performances

Question 3

3 Responses to 3 schools

Answer 3

1. January effect: patterns dimnish after becoming public
2. Statistical predictions become less efficient than econ predictions
3. Bandwagon effects and underreactions are exceptional cases.

Question 4

Behaviourals

Answer 4

1. Tulip

2. Smart money: smart investors cannot sell the stocks.