Stock market efficiency

Stock market efficiency:

Efficient market: prices of securities in the market should fully and quickly reflect all available information, which means that market prices should be close to intrinsic values (market in equilibrium)

Levels of market efficiency

Weak-form efficiency - stock prices already reflect all information contained in the history of past price movements (only past prices, volumes, and returns).

Semi strong-form efficiency - stock prices already reflect all publicly available information in the market (only past publicly available information).

Strong-form efficiency - stock prices already reflect all available information in the market, including inside information (all public and private information).

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What are Scrap, Defectives and Spoilage?

What are Scrap, Defectives and Spoilage?

Scrap: -Scrap is the residual outcome from a production process which generally has disposable value.

Defectives: -Defectives are part of a production process. Defectives can be rectified by occurring some additional costs. Defective works occurs because of many reasons like inefficiency of workers, poor quality of raw materials, production planning problems etc. Defectives products can be rectified by using additional material, labor and overhead and can be sold as good output.

Spoilage: -Spoilage occurs when goods are damaged in a way that there is no chance for rectification. Spoilage is disposed off without any further rectification.

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