Abstract
Paul Samuelson’s result that prices follow a random walk buffeted only by random and unknowable forces once arbitrage has extracted value from every last bit of price disparity clearly created a school of its own, and perhaps even a faith, among financial theorists. Believers have constructed myriad reasons why it must be true as a matter of faith. Still others believe that markets are not as perfect as the arbitrage proponents insist. Both can cite many examples and scenarios to “prove” their case. However, their protestations seem to do little but preach to the converted and seem to have little effect on changing the minds of the skeptics.
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© 2013 Colin Read
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Read, C. (2013). Discussion and Applications. In: The Efficient Market Hypothesists. Great Minds in Finance. Palgrave Macmillan, London. https://doi.org/10.1057/9781137292216_10
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DOI: https://doi.org/10.1057/9781137292216_10
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-32435-4
Online ISBN: 978-1-137-29221-6
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