Price Dependencies and Investors’ Choice

Authors

  • Jeong Lee University of North Dakota

DOI:

https://doi.org/10.58886/jfi.v11i1.2508

Abstract

Under the efficient market hypothesis, where many investors resort to “buy and hold” strategies with maximum diversifications, “capitalization-weighted indexation” may offer investors the best risk-return combination. But the existence of non-linear dependences shows that prices of securities may be subject to temporary shocks that obscure their true value. In this case, “fundamental indexation” may achieve returns superior to the capitalization-weighted indexation.

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Published

2013-06-30

How to Cite

Lee, Jeong. 2013. “Price Dependencies and Investors’ Choice”. Journal of Finance Issues 11 (1):26-32. https://doi.org/10.58886/jfi.v11i1.2508.

Issue

Section

Original Article