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Introduction

Published online by Cambridge University Press:  19 October 2009

Stephen H. Archer
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Extract

Security markets in major industrial countries have frequently been referred to as close to perfect markets. Probably the highest quality market for a class of securities is the United States government bill market; however, it is also frequently inferred that the United States listed equity market is also a near perfect market. In a perfect market, no opportunities for profit based upon past price movements or any other past data should exist; stocks in a perfect market are always at their proper price except for purely random fluctuations.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 3 , Issue 3 , September 1968 , pp. 231 - 233
Copyright
Copyright © School of Business Administration, University of Washington 1968

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References

1 Bachelier, Louis, Theory of Speculation, a thesis presented to the Faculty of Sciences of the Academy of ParisGoogle Scholar, reprinted in Cootner, Paul H., The Random Character of Stock Market Prices (Cambridge, Mass.: The M.I.T. Press), 1964, pp. 17–78Google Scholar.

2 Working, Holbrook, “A Random-Difference Series for Use in the Analysis of Time Series,” Journal of the American Statistical Association, XXIX (March 1934)Google Scholar.

3 Kendall, Maurice G., “The Analysis of Economic Time Series I,” Journal of the Royal Statistical Society (Ser. A), CXVI (1953)Google Scholar.

4 Roberts, Harry V., “Stock Market ‘Patterns’ and Financial Analysis: Methodological Suggestions,” Journal of Finance, XIV (March 1959)Google Scholar.