Compare and Contrast the Ideas of "Strong State," "Weak State

question 49

Essay

Compare and contrast the ideas of "strong state," "weak state," and "failed state." Please include in your answer examples of states that fall within each one of these three categories.

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Definitions:

Weak Form

A market efficiency hypothesis that suggests past prices and volumes have no effect on future prices, implying that past market data cannot be used to predict future market movements.

Efficient Market Hypothesis

A theory suggesting that at any given time, securities prices reflect all available information, meaning it's impossible to consistently achieve higher returns.

Superior Returns

Returns that exceed the performance of a benchmark index or the average returns of a particular investment category.

Neglected-firm Effect

A theory suggesting that lesser-known, smaller companies can provide higher returns than their larger counterparts due to lack of analyst coverage.