- 麗澤経済研究 (ISSN:09196706)
- vol.15, no.2, pp.53-78, 2007-09
EMH (Efficient Market Hypothesis) assume all the information are reflected in price so the effort try to finding hidden value seems only west time. But the history of boom and bust in financial market show that the prices of capital assets are not always reflect the intrinsic value. We review the three schools of investment and discuss the relation between risk and return. Because the real investment risk is the danger of a loss of quality and earning power through economic changes or deterioration in management, so the risk shall not be measured by the percent of price variability. And the idea of risk management based on rational market price and beta shall be abandoned.