S E32: The Financial Sector - Bonds, Stocks and Shares - should you or shouldn't you?
Think Like An Economist
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The Efficient Markets Hypothesis
If a company is doing well, or their future looks promising, then their share price will rise. The net present value of the company's future earnings are what drives behavior. So it's all about its future prospects and how well we think they're going to do in the future.
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