Explain Why in an Efficient Market All Investments Have an Expected

question 43

Essay

Explain why in an efficient market all investments have an expected NPV of zero.

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Definitions:

Organisation Development

A branch of study committed to elevating the capabilities and knowledge of individuals to foster more successful change and performance in organizations, through a combination of research, theoretical insights, and practice.

Behavioural Science

The study of the interactions among organisms and their environment, focusing on the psychological, social, and biological aspects of behavior.

Organisational Effectiveness

The measure of an organization's efficiency in achieving its goals and objectives with the optimal use of resources.

Lewin's Planned-Change Process

A model that outlines the steps for successful organizational change: unfreezing, changing, and refreezing.