If markets are efficient, how is it possible that market bubbles and crashes occur?

Riskless, costless arbitrage is the cornerstone of the efficient market hypothesis. However, multiple unavoidable risks in securities markets inhibit arbitrage as defined in financial theory (and investment textbooks) from successfully eliminating mispricing. Please list two of these unavoidable risks and briefly explain how each limits arbitrage in practice. Use an example to make your case for each risk. View keyboard shortcuts

What is the diferrence between finanical institutions  and financial markets and  Can they both run more smoother.

One approach for using multifactor models is to use factors that capture systematic risk. Which of the following is not a common factor used in this approach? Market capitalization O Unexpected changes in real GDP O Unexpected changes in inflation Yield curve shifts Consumer confidence