Peer Review

What Is Market Efficiency?

Material Detail page

Reviewed:: Jan 31, 2019 by Business

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Ratings

Overall Rating:

Content Quality:

Effectiveness:

Ease of Use:

Overview:

This webpage provides an explanation about “Market Efficiency” from the capital market angle. It details the effects, anomalies, degrees of efficiencies and downside in the electronic age. Users can quickly read through the page and click on the links that further defines another related sub-concept. This can serve as a supplementary material as well as a quick guide to recalling the concepts and its application.

Type of Material:

Reference material

Recommended Uses:

As reference material in Investopedia Insights, it can be used in class, or out of class.
The material is concise and provides references from Investopedia entries on other financial terms that might be unfamiliar to the student.

Technical Requirements:

A familiar browser is all that is needed. Firefox, Chrome and Explorer were all used to successfully access the material.

Identify Major Learning Goals:

Student will be able to define market efficiency and the role that prices play in achieving market efficiency.
Students will be able to describe the efficient market hypothesis.
Students will be able to describe accurately what causes market inefficiency.

Target Student Population:

The target population would be upper-division undergraduate students in finance and/or economics who would use the article as a primary reference. It could also be useful to a graduate student in finance or economics who would use the material as an introduction to, or refresher about efficient markets.
This material would not be appropriate for research-based graduate work since no academic literature citations are provided for students interested on more recent publications on market efficiency.

Prerequisite Knowledge or Skills:

A student would benefit from an introductory economics of finance class to introduce them to stock market behavior, financial investment, transaction costs, etc.

Content Quality

Rating:

Strengths:

Concise, accurate reference material with links to terms or concepts which need to be further defined or explained to the student.
Can be used as a stand-alone reference or to test students on fundamental concepts in preparation for a more advanced course in finance or economics.
It is easy to read the material and understand the different parts of the building blocks for a given concept with relevant working links

Concerns:

Only one author on this topic with no link to his seminal publication on this subject is mentioned, in a field with lots of possible citations on this subject.

Potential Effectiveness as a Teaching Tool

Rating:

Strengths:

Students and/or instructors can reference and apply it for a quick review of all the concepts learned in class – market efficiency, efficient market hypothesis, fair value, behavioral finance, etc.
Quick source of learning for the student
Reliable enough for an instructor who wants to use it as a quick reference and as foundational material.

Concerns:

Does not identify any specific learning objectives
Does not identify prerequisite knowledge since it serves as a financial/economical encyclopedia.

Ease of Use for Both Students and Faculty

Rating:

Strengths:

The entry is solely in text material
Is clear in its exposition.
Webpage is relatively current (October 2013) with working links.

Concerns:

Is not visually appealing
Page is very busy with other content all around the results page.

Other Issues and Comments:: The parent website – www.investopedia.com - provides a searchable database of economic and financial terms and concepts. Users can browse it alphabetically or type in the term for a quick search to an in-depth explanation. It also provides access to articles, videos, tutorials and slideshows. This can serve as a supplementary material as well as a quick guide to recalling economic or financial concepts and its application. Highly recommended to bookmark the site for quick access.
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