how and why factors influencing the efficiency of markets do not always exit in practice. give examples.?

Answer 1

Eugene Fama defined efficient marker as "a market where there are large numbers of rational profit maximizers actively competing, with each trying to predict future market values of individual securities, and where important current information is almost freely available to all participants."

The real markets can be different. For starters, the number of profit maximizers can be small and/or they can be irrational (subject to fads and panics). Further, information (and filtering it out of the noise) may not always be cheap. Finally, there may be transaction costs and/or entry/exit barriers...

Answer 2

According to the efficient market hypothesis the value of an asset, reflects all information that is known. But if there are barriers to information becoming public, such efficiency is not always possible.

Secondly, most traders are not driven primarily by whether prices are cheap or expensive, but by whether they expect them to rise or fall. This means that already overpriced assets can still reach higher levels thus creating a bubble.

Answer 3

depends on how the doors of the markets are placed ie some will swing inwards, other outwards, and then you may come across magic doors that open when you decide to go in/out