Table of Contents
- About the Authors
- Money, Banking, and Your World
- The Financial System
- Interest Rates
- The Economics of Interest-Rate Fluctuations
- The Economics of Interest-Rate Spreads and Yield Curves
- Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities
- Financial Structure, Transaction Costs, and Asymmetric Information
- Bank Management
- Innovation and Structure in Banking and Finance
- The Economics of Financial Regulation
- The Financial Crisis of 2007–2008
- Central Bank Form and Function
- The Money Supply Process
- The Money Supply and the Money Multiplier
- Monetary Policy Tools
- Monetary Policy Targets and Goals
- Foreign Exchange
- International Monetary Regimes
- Money Demand
- IS-LM in Action
- Aggregate Supply and Demand, the Growth Diamond, and Financial Shocks
- Monetary Policy Transmission Mechanisms
- Inflation and Money
- Rational Expectations Redux: Monetary Policy Implications
Money and Banking, v. 1.0
by Robert E. Wright and Vincenzo Quadrini
Chapter 7 Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities
By the end of this chapter, students should be able to:
- Explain when expectations are rational and when they are irrational.
- Explain how corporate equities (stocks, shares of a corporation) are valued.
- Explain what is meant by the term market efficiency.
- Describe the ways in which financial markets are efficient.
- Describe the ways in which financial markets are inefficient.