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Market efficiency

C/E/651. Dissertation. Evaluation of the effectiveness of forecasting in times of financial crisis.

WORDS:
10350
DATE:
2011
PRICE:
109.99 GBP

This dissertation aims to discover whether it is possible to accurately forecast the way in which an exchange rate market will operate, focusing on periods of financial crisis. Focus is made on the Sterling/Euro exchange rate in order to assess the efficient market hypothesis (EMH) and the way in which invest forecast accurately. The study also pays great attention to the overreaction hypothesis. The dissertation begins by presenting the background to the study and to EMH. The aims and rationale behind the study are also presented. The review of literature analyses the works and theory of a wide range of scholars, like Brown, Harlow, and Tinic, Atkins and Dyl, Zarowin, and Dissanaike. Primary data is collected by analysis of empirical data, and the paper focuses on transaction costs and Measurement of Above-average Returns. Secondary data is collected through analysis of the literature mentioned in the review. The methodology highlights the limitations of both forms of research. The finding section looks at the arguments supporting both the EMH and the overreaction hypothesis. Conclusions are made regarding the aim of the research, and an overview of the project and recommendations are made for further research.

 

KEYWORDS: Dissertation, forecast, exchange rate market, financial crisis, Sterling/Euro exchange rate, efficient market hypothesis, EMH, overreaction hypothesis, transaction costs, Measurement of Above-average Returns,

 
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