A market anomaly is a malfunction of a market that distorts the price, and therefore, in the case of financial market performance(which is linked to the price of investment and the evolution of the price linked to the Best Forex Hosting).
The concept is similar, but different from that of market failures, which concerns rather faulty allocation of economic resources. These two phenomena may have common causes or effects on each other.
A market anomaly can have two origins: structural factors – that the market does not meet the criteria of perfect competition(eg. monopoly, or the stock market, the fact that large investors alongside small investors).
Behavioral factors that buyers and sellers are subjected to psychological effect through altering their judgment and therefore their decisions to buy or sell( overestimation or underestimation of the fair price concept itself also subjective).
Some advocate a strong state intervention in the economy to correct market anomalies. This is against the fact that through the decision of the government can be just as important (phenomenon of technocracy), to which is added rigidity operation not covered by the phenomena of self-correcting specific Best Forex Hosting market.
Moreover, this intervention by the authoritarian nature can become detrimental to the freedom of choice of individuals. Finally, the role of the state is very limited in the face of globalized markets, unless they act in concert through intergovernmental organizations to the size of such markets (eg EU, the WTO, ILO, etc.)
That said, the free market requires compliance rules of the game in the definition and control which democratic state representative citizens are legitimately involved. The right balance avoiding the excesses of both the market and government lie in the rules of operation and intervention that are flexible and collaborative, preventing – and remedying – the most important event of failure for economic and social harmony.
Market capitalization is the market value of all outstanding shares of a corporation. This is the price it would cost if you to buy all the shares of a company at their current market price. When an investor wishes to acquire 100 % of the shares of a corporation, he must generally pay more than the market price to encourage existing shareholders to sell their shares.
Economic theory is used to connect future profits and market capitalization of the company. Assuming that shareholders seek only their financial gain and that markets operate efficiently.
The market capitalization depends on two things only: the expected future profits for shareholders and the financial risk associated with it. The market capitalization is even higher if expected profits are high.