How Do the Securities With a Negative Expected Return Reduce Risk?
Background
- The efficient market theory was developed by Eugene Fama in 1970. His paper on the subject said that because there are so many professionals and people always trying to make money in the stock market, putting any sort of time and effort into researching stocks was useless. You would be better off just buying a diversified portfolio of stocks. Although at the time it was a big discovery, it has since been proven wrong many times over.
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