Market Efficiency and Investment Essay Example | Topics and Well Written Essays - 2000 words

Market Efficiency and Investment - Essay Example Marketing is an oft conceived word used in our daily life. It is a normal word which may often be found as a part of our day to day conversations and has more to do with the approach than the execution of a business idea.   It was first explained by the American Market Association as an â€Å"activity†.   Later the definition was elaborated and modified to involve the various institutions and processes employed for making, communicating and delivering products which are of value to the stakeholders-customers, clients, partners and the society at large. The term was derived from the original meaning which taken literally meant simply going to the market to shop or to sell goods and services there. Before we proceed further, clear and crisp definitions of the terms that would be used in the text are needed. This is important to develop a clear and concise understanding of what will follow. Market Price is the total lump sum money that is actually paid for a particular asset. The worth of an asset can be further categorized into 2 broad genres. These are the individual worth and the market worth of the asset. Individual worth is the highest price bid by an individual purchaser who takes into perspective all information that is available to him in a very effective manner. Market worth, on the other hand, is the price at which investment would be exchanged and traded on the market. It is the place where buyers and sellers use all available information in a very efficient manner. According to some noted scholars, an individual’s worth need not be equal to the market’s worth. It is not necessary that it is equal to the market price or the valuation. The point in perspective is that an individual’s worth is dependent on certain specific inputs whereas market worth, on the other hand, is dependent on market views and consensus cum collaboration on inputs.