The financial markets context

Introduction

How do financial markets match providers with users, and how efficiently does the market determine prices? Financial markets can be notoriously volatile, and the stock market is possibly the most volatile of them all. This is after all the place where, depending on skill or on luck, investors either ‘make a killing’ or ‘lose their shirts’. But which does it depend on – skill or luck? Or does it depend on a mixture of the two? In this unit, you will find the answers to these key questions and discover the importance of the Efficient Markets Hypothesis.

This material is from our archive and is an adapted extract from Financial strategy (B821) which is no longer taught by The Open University. If you want to study formally with us, you may wish to explore other courses we offer in this subject area [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] .