• Unit 4: Equity Markets

    This unit discusses stock and shares and other equity securities, as well as the role of stock exchanges in financial markets. Among different types of markets, the Stock market is the most popular both among practitioners and retail investors. In this unit, you will be exposed to various tools of the stock market and the notion of the effective market hypothesis (EMH), as well as more recent advances in financial theory, such as the behavioral hypothesis and the adaptive market hypothesis.

    Completing this unit should take you approximately 1 hour.

    • Upon successful completion of this unit, you will be able to:

      • describe the role of stock exchanges in capital markets;
      • analyze the efficient market hypothesis and its importance in equity markets; and
      • compare primary and secondary markets by examining how stocks are issued in each.

    • 4.1: Stocks and Shares

      • Stocks and Stock Markets Book

        Here you will learn about the different stock market transactions, including private placement and IPOs. You will also learn about stock repurchase. Do you know the difference between FINRA and the SEC?

    • 4.2: Stock Exchanges

      • Buying and Selling at Securities Exchanges Book

        This highlights where securities are traded. You will learn more about the role of broker and dealer markets. You will also come to learn how these different markets are regulated. What are the different markets where securities are traded? What are the differences between each market?

    • 4.3: Market Efficiency

      • Market Efficiency Book

        There are generally two theories to assist pricing. The Efficient Market Hypothesis (EFM) and the Behavioural Finance Theory. Understanding the limitations of each of the theories is critical. Read the three concepts on this page to have a comprehensive understanding of EFM. What are the limitations of the EMH?

      • The Effect of Behavioral Finance on Stock Investment Decisions Book

        Having understood what EFM is and its limitations, here you will learn about Behavioural Finance Theory and its role in investment decisions. What are the main effects of Behavioural Finance Theory on investors' decisions?

    • Unit 4 Study Resources

      This review video is an excellent way to review what you've learned so far and is presented by one of the professors who created the course.

    • Unit 4 Assessment

      • Unit 4 Assessment Quiz
        Receive a grade

        Take this assessment to see how well you understood this unit.

        • This assessment does not count towards your grade. It is just for practice!
        • You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
        • You can take this assessment as many times as you want, whenever you want.