Explain the Analysts' Role in Making the Capital Markets Efficient

question 28

Essay

Explain the analysts' role in making the capital markets efficient.

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Definitions:

Doodads

Informal term for small gadgets or devices, often novel or unnecessary; not a standard economic term.

Pareto Optimal

An economic state where resources are allocated in such a way that it is impossible to make any one individual better off without making at least one individual worse off.

Utility Functions

Functions that model the preference ranking of various combinations or bundles of goods and services by assigning a utility value based on the satisfaction obtained.

Marginal Rate of Substitution

The rate at which a consumer is willing to substitute one good for another while maintaining the same level of satisfaction or utility.