Fractal markets hypothesis and Pre-emption rights: Difference between pages

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(FMH).
The rights of a shareholder to have the first refusal on any new shares in the company as they become available.


The fractal markets hypothesis is an evolving model of investor and market behaviour which identifies repeating patterns in market prices and conditions.
In the UK these rights are enshrined in company law.
 
The FMH may explain why extreme negative (and positive) outturns are observed more frequently in real financial markets than predicted by simpler efficient market models.
 
 
Under the FMH, a key contributory factor is the difference in investment time horizons between different classes of market participants.
 
 
If the FMH is borne out in practice, then real financial markets are significantly less stable than predicted and described by more traditional market models.


Outside the UK pre-emption rights may or may not be recognised in law.




== See also ==
== See also ==
* [[An introduction to equity capital]]
* [[Cash box placing]]
* [[Rights issue]]
* [[Shareholders]]


*  [[Efficient market hypothesis]]
[[Category:Corporate_finance]]
*  [[Behavioural economics]]
[[Category:Compliance_and_audit]]
 
==Other links==
 
*  [http://www.bankofengland.co.uk/research/Pages/fspapers/fs_paper23.aspx Bank of England Financial Stability Paper No 23]
 
[[Category:Capital_Markets_and_Funding]]
[[Category:Risk_Management]]

Revision as of 03:43, 19 May 2016

The rights of a shareholder to have the first refusal on any new shares in the company as they become available.

In the UK these rights are enshrined in company law.

Outside the UK pre-emption rights may or may not be recognised in law.


See also