Principles of Finance I WEEK 8: Discussion Prompt #1 -For a market to be efficie
ID: 2780968 • Letter: P
Question
Principles of Finance I WEEK 8: Discussion Prompt #1 -For a market to be efficient, a market must be large and liquid. Accessibility and cost information must be widely available and released to investors at the same time. In the age of information technology (IT), however, markets all over the world are gaining greater efficiency. For this discussion, discuss specific ways that IT has helped to make markets more efficient. As an investor, what information would you be most interested in before making investment decisions?
Explanation / Answer
Information Technology has had immense effects on the way individuals access information. It has created new platforms for people to gather information, such as, Mobile Phones. Portfolio tracking was once the domain of large institutional investors with access to huge manpower & resources but the same can now be done by every individual at his/her home!
A Great many websites over the internet now run free platforms for people to track how their investments are doing and collate all the information all the key events relating to these investments in one place, and much more!
IT has thus, vastly enhanced accessibility for capital markets. With the advent of internet, data spreads faster & much more freely. This has minimized the concept of insider information in most capital markets around the world.
The information that an investor would most likely be interested in before making investment decisions may be as follows:
* Past Financial Performance of the Stock under review.
* Details about the Business the company operates in
* Details of the competitors of the company
* Any possible threats that may harm the business of the company.
* Details of the general corporate strategy.
* Details of the past performance of its share price.
* Overall business conditions of the Industry/Market the company operates in
* Product Reviews, Feedbacks etc.
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