APSN CFA 2013 Level 1 Study Session Market Organization, Market Indices, and Market Efficiency

This study session addresses how securities are bought and sold and what constitutes a well-functioning securities market. The reading on market indexes gives an understanding of how indexes are constructed and calculated and the biases inherent in each of the weighting schemes used. Some of the most interesting and important work in the investment field during the past several decades revolves around the efficient market hypothesis (EMH) and its implications for active versus passive equity portfolio management. The readings on this subject provide an understanding of the EMH and the seemingly persistent anomalies to the theory, an understanding that is necessary to judge the value of fundamental or technical security analysis.