Problem
1) Consider the possibility that markets are inherently unstable. What implications would this have for the efficiency of financial markets and the allocation of resources? Discuss the potential role of market instability in signaling incorrect information and inefficient resource aHoca?on.
2) Define market efficiency and its significance in the context of the efficient market hypothesis. Explore the "semi- strong" definition of market efficiency and its implications for the role of publicly known information in influencing stock prices. Discuss the idea that studying companies and poring over public documents may not provide an advantage in an efficiently priced market.