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Efficiency and Limited Arbitrage in the Stock Markets:Evidences from ISE

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  • Bekir Elmas

Abstract

In this study, we examine whether the arbitrage is limited for the trading stocks at Istanbul Stock Exchange (ISE), which is the stock market in Turkey. For doing so, stocks held by the companies traded at different groups such as A, B and C on ISE have been considered. By virtue of the study conducted, it has been determined that there is a long-termed correlation by and between the stocks held by the 3 different companies and traded under different groups and that deviations emerging in the short term have been corrected in a short time. Accordingly, it can be concluded that the arbitrage is not limited but operating on a rational basis for the stocks held by the companies trading at different groups such as A, B and C on ISE.

Suggested Citation

  • Bekir Elmas, 2012. "Efficiency and Limited Arbitrage in the Stock Markets:Evidences from ISE," Istanbul Stock Exchange Review, Research and Business Development Department, Borsa Istanbul, vol. 13(49), pages 39-58.
  • Handle: RePEc:bor:iserev:v:13:y:2012:i:49:p:39-58
    as

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    File URL: http://www.borsaistanbul.com/datum/imkbdergi/EN/ISE_Review_49.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Market efficiency; arbitrage; stock market;
    All these keywords.

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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