Page 418 - Microsoft Word - 00 ACCA F9 IWB prelims 2017.docx

Chapter 20

7.6 Conclusions

In the semi-strong stock market:

 shares will be fairly priced (within 5 – 10 minutes of news breaking)

 managers can improve shareholder wealth by investing in positive NPV projects
and communicating this to the market.

 most investors (including professional fund managers) cannot consistently beat
the market without inside information.

Illustrations and further practice

Now try TYU question 14 from Chapter 20.

410