COMM 308 Chapter Notes - Chapter 10: Autocorrelation, Abnormal Return, Event Study

• School: Concordia University
• Department: Commerce
• Course: COMM 308
• Professor: Raad Jassim

Document Summary

E(cid:126)cient market - reacts quickly and relatively accurately to new public info, which results in prices that are correct on average. Conditions for e(cid:126)cient markets: market must have integrity, such that all market participants are treated fairly. This condition is why such heavy emphasis placed on disclosure - revelation of all material facts so that everyone in the market is buying and selling based on the same material facts about the (cid:128)rm. Lack of disclosure is one reason that black markets (smaller and more loosely regulated markets) tend to be less e(cid:126)cient and that prices in these markets don"t accurately re(cid:129)ect available info. Disclosed in such a way that not all market participants are aware of what"s going on. Info disclosure is important part of securities law - body of law that ensures, through capital market regulations, that all investors have equal access to, and an equal opportunity to react to, new and relevant info.