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7: Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities

  • Page ID
    582
    • Anonymous
    • LibreTexts
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    Learning Objectives

    By the end of this chapter, students should be able to:

    • Explain when expectations are rational and when they are irrational.
    • Explain how corporate equities (stocks, shares of a corporation) are valued.
    • Explain what is meant by the term market efficiency.
    • Describe the ways in which financial markets are efficient.
    • Describe the ways in which financial markets are inefficient.

    Thumbnail: Image by Markus Spiske from Unsplash


    7: Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities is shared under a CC BY-NC-SA 3.0 license and was authored, remixed, and/or curated by Anonymous via source content that was edited to conform to the style and standards of the LibreTexts platform; a detailed edit history is available upon request.