Abstract
Introductory finance textbooks commonly address capital market efficiency from a largely static perspective with little or no attention to the dynamics that bring the price of a security into equality with its intrinsic value. This note offers a simple pedagogy to illustrate the process by which capital market efficiency will return a stock’s price to equal its true value and simultaneously bring the expected rate of return on the stock into equality with the market’s required return.
Recommended Citation
(2026)
"A Pedagogical Note on the Dynamics of Capital Market Efficiency for the Introductory Finance Course,"
Journal of Economics and Finance Education: Vol. 16:
Iss.
1, Article 10.
Available at:
https://scholarship.rollins.edu/jefe/vol16/iss1/10
