Guide to Analysing Companies
E EFFICIENT MARKET THEORY
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FINANCE Essencial finance
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- EFTPOS See electronic funds transfer at the point of sale. Egibi
- Electronic funds transfer at the point of sale
- Electronic purse
- Embedded value
- Emerging market
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EFFICIENT MARKET THEORY 117 02 Essential Finance 10/11/06 2:22 PM Page 117 that the prices of securities quickly reflect all the available in- formation about them and that prices will automatically adjust to this information. This is true to a point when markets are big enough and liquid enough for no single investor (or group of in- vestors) to have an effect on prices. Some markets – such as New York and London – are efficient most of the time but not always. Canny investors may profit when they are not. EFTPOS See electronic funds transfer at the point of sale. Egibi Probably the first recorded bank in history. Mr Egibi, the bank’s founder, lived in Damascus in the latter part of the reign of the Babylonian king Sennacherib (705–681bc). A stone tablet recording the bank’s first loan is in the British Museum. Electronic funds transfer at the point of sale A way of paying for shopping electronically, commonly abbre- viated to eftpos. A plastic debit card gives the retailer access to a customer’s bank account. The account is debited imme- diately with the cost of the goods or services purchased. Cus- tomers still receive a receipt with the amount of the transaction and, if necessary, can verify the payment seconds later by checking the balance on their account at a nearby atm or cash machine. Electronic purse Any method of storing money electronically and of carrying it around like a purse. Hence a plastic debit card, with an em- bedded microchip in which is stored value that can be spent on E 118 EFTPOS 02 Essential Finance 10/11/06 2:22 PM Page 118 goods or services, is an electronic purse. (See also smart card.) Embedded value The capital value of an insurance contract to an insurance company, as measured by the annual premium income minus the annual cost of managing the policy multiplied by the number of years that the policy has to run. Thus a policy with seven years to run that brings in a premium income of $35 a year for an institution whose average cost of running a policy is $20 a year has an embedded value of $105 [($35 $20) 7]. Emerging market A stockmarket in a fast-developing country (such as Taiwan, India or even China) that has little history of domestic capital markets. In the late 1980s and early 1990s, some of the emerg- ing markets grew rapidly. Their growth was fuelled by an in- creasing supply of new shares – from local privatisations and from the flotation of old-established family firms – and by the increasing demand from western investors for stocks whose prices would increase in value more quickly than many of those in their domestic markets. As western markets rebounded in the mid-1990s, the growth of emerging markets slowed down. They were dealt a further blow by Asia’s economic crisis, which began with the devalua- tion of the Thai baht in July 1997. This caused stockmarkets in the region to tumble, many to the point where their weight- ings in world indices compiled by Morgan Stanley Capital In- ternational and others were so small that international investors began to lose interest in them. Since then many Asian markets have rebounded, and new markets in eastern Europe have also attracted investors’ attention. Download 1.1 Mb. Do'stlaringiz bilan baham: |
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