Leo Said:

EMH cannot be correct?

We Answered:

For starters the EMH is basically dead for a variety of reasons, however, with regard to 1 I don't think you quite understand the intent and I am certain a neural net would provide an incorrect outcome. If I could fit integrals into Yahoo Answers I would provide you a reason that you should not be able to use any traditionally constructed net and get a solution that works one way or the other. I am getting ready to work with a PhD mathematician whose discipline is neural networks and other non-deterministic systems to try and solve a somewhat similar problem. However, it could be proved that you cannot use a neural network program to solve this type of problem. The reason is too complicated for Yahoo Answers, but your reasoning is close. If prices are fully informative then all other data outside their covariance matrix should result in white noise, given the ideas behind the hypothesis. This can be falsified by the simple observation that for prices to be efficient because of evaluation of the underlying security then others could free-ride using their prices as informative. As such, some people would participate in noisy pricing, except the Bayesian structure would grant arbitrage opportunities to the informed which would bias price and so they would not be fully informative.

As to two it is not proper to think as a zero sum game, nor in the two strategy game you are using. If the EMH is valid as written then you have Brownian motion and so it pays nothing to be Buffet or a trader above rational expectations. A price has a sample size of one, but it is still a valid Bayesian sample. Bayesian statistics can work with a sample size of one, given prior information. It is noisy, but you can do it. As such, given the model beliefs, each price is always a valid expectation.

The model refers to present prices as discounted present values of future value given the covariance matrix, so future prices are implicit.

Tom Said:

Is there any possible way that I can email Sandra Bullock & she'll actually read it?

We Answered:

sorry hate to tell you this much the first person that answer your question is dead wrong with telling you that your school had her telephone number in email address that is private info that your school does not have at all the only thing that she does have is her fanmail address

Sandra Bullock - Fan Mail Address
http://www.google.com/url?q=http://www.f…


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