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Inefficiency Within a Stock Market Creat Barrier to Fulfulment of its Main Function and Hence can Cause Significant Difficulties
Finance & Accounting
Pages 11 (2761 words)
Inefficiency within a stock market create barrier to fulfilment of its main function & hence can cause significant difficulties for managers making corporate decisions. Table of Contents Table of Contents 2 Introduction 2 Stock Market Efficiency 3 Reasons of the Inefficient Stock Market 4 Effects of the Inefficient Stock Market 5 Conclusion 8 Reference 9 Introduction A stock market can be said efficient if the market reflects all the information available to all the investors.
The main functions of the stock market includes evaluation of the securities those are listed in the stock market which in turn help the companies to get more capital for production, thus the chances of industrial growth increase. The functions of the stock market also includes the marketing of the government securities, also provide safety in the dealings as the companies have to abide by the rules. The stock market is also the index of the economy; the banks also provide loans against the stock market securities. From the above discussion the importance of the stock market can be understood. But when the stock market which is the economical indicator is not performing as it should be then it would be a problem for the community associated with that stock market. The common people who are the investors of the securities they would face problem as the stock market is not reflecting the right information, they may invest in the wrong place. The foreign investors and the government would not get the right information as the stock market is not efficient, not the actual information is available in the market. ...
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