News & Events

IEM Shows Efficiency of Markets

A columnist writing about the efficiency of financial markets points to a Dublin-based futures exchange that took contracts on when CIA Director George Tenet would resign. After being down for several weeks, the price increased significantly in the weeks leading up to Tenet's actual resignation. Another example, he says, is the IOWA ELECTRONIC MARKET, a real-money futures exchange run by the University of Iowa that has allowed for betting on the outcome of each presidential election since 1988. Over the past four elections, this exchange's average forecast error has been about half that of the major polling organizations.

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