You are required to write an essay discussing the academic evidence of how different types ofinvestors impact the efficiency of financial markets. The types of investors that you should considerare institutional investors, such as hedge funds, mutual funds and banks, as well as high-frequencytraders and individual investors. Your essay can address any aspect of market efficiency(informational vs rationality) and is not limited to equity markets. Your essay will need to considerboth positive news and negative news when answering the question. You should also discuss whatvariables permit or prevent the different investor types from affecting the efficiency of markets, andif the influence of these variables changes over time. Marks will be awarded for the depth ofdiscussion, as well as the clarity and structure of your essay. Your essay should provide a conclusionabout which investor type you think is most influential in their effect on market efficiency, and whythis is so

You should also discuss what variables permit or prevent the different investor types from affecting the efficiency of markets, and if the influence of these variables changes over time.

1. Financial markets promote economic efficiency byA) channeling funds from investors to savers.B) creating inflation.C) channeling funds from savers to investors.D) reducing investment.

What are the various forms of market efficiency? State their implications

Which of the following statements about the strong form of market efficiency is not correct? Reading required:            Learning objective 2.5.2 on page 63-64.Group of answer choicesCapital markets are not considered to be efficient in the strong form.Investors are able to participate in 'insider trading'.Security prices fully reflect all information, including that which is not publicly available.Investors are unable to earn abnormal returns through private information.

According to the efficient market hypothesis, prices of securities in financial markets fully reflect which of the following?Group of answer choicesAll available informationOnly past informationLimited informationPrivate information