ECON1323: Principles of Finance - Essay - Economics Assignment Help

Assignment Task:

Overview 

You are required to construct an essay of 500 -800 words expressing your personal views as to the effectiveness of the market in setting prices. 

The essay is aimed at providing you with the opportunity to create an intellectually constructed essay that is well-written. Marks will therefore be awarded for “style” as well as for structure and content. 

Course Learning outcomes 

This assessment is aligned with: 

• CLO1: Identify the nature and key components of financial systems both domestically and globally 

• CLO2: Apply the concepts of time value of money to various valuation models including debts and equities 

• CLO3: Illustrate the concept of diversification and examine the impact on the risk and return relationship 

• CLO4: Analyze the characteristics and functions of arbitrage and derivatives and how they are applied to risk management strategies. 

Assessment details 

The discussion topic for the first assignment essay is the Benjamin Graham (1934) quote: 

“In the short run, a market is a voting machine, but in the long run it is a weighing machine” 

His cautionary tale is that stock prices change rapidly in the short term: people follow each other, and herding behavior is a major force. In this sense, the market is a “voting” machine. However, over a period of possibly many years, the psychological factors are subtracted out and asset prices come to reflect the value of the company in relation to economic fundamentals so that the market becomes a “weighing” machine. 

You are required to construct an essay of 500 - 800 words expressing your personal views as to the effectiveness of the market in setting prices. Specifically, your views should be developed based on the review of Week 

1 learning materials including related readings, discussions, and activities: 

Week 1 discusses a short history of Stock markets including the unfolding of the three financial crises in recent time. In Act I we witness how the economy is impacted by macroeconomics factors and the role that central banks played. Act II has presented elements of “pantomime” as markets appear to lose all sense of proportion for Internet stocks. Act III presents the effect when financial leverage combines with their toxic financial concoctions. In your essay, our expectation is that you discuss the investors’ experience and their behavior prior to, during, and post a financial crisis. 

The essay is aimed at providing you with the opportunity to create an intellectually constructed essay that is well-written. Marks will, therefore, be awarded for “style” as well as for structure and content. 

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