IndexThe Titanic: Evidence of the Efficiency of US Capital MarketsThe IMM and the TitanicThe Cost of the Sinking of the Titanic to the IMMConclusionThe Titanic: Evidence of the efficiency of US capital marketsThe effectiveness of stock markets involves the investigation of how much, how quickly, and how accurately available data is incorporated into security prices. Financial economists classify the efficiency of capital markets into different categories based on the significance of the information available on security prices. Empirical evidence from the study of the sinking of the Titanic in 1912 and its effects on the International Mercantile Marine Company, its parent company, is constructive in the perception of the efficiency of capital markets. The effectiveness of US stock markets is then analyzed through the study of theories from the economic literature on the Titanic. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayIMM and the TitanicThe sinking of the ship Titanic in 1912 had a great impact on the company that built the ship, a representation of the entire economy. The collapse of the liner can be seen as a collapse of the company's shares, and its recovery has been no less dramatic than that of the rest of the market. The formal efforts of the IMM corporation after the sinking of the Titanic raise the idea of ​​a strong capital market in the United States as a legitimately questionable issue. In many ways, the culture that exists in the United States behaves as if financial analysts demonstrated the state of the market several decades ago. Noticeably, a gap has developed between current economic literature and persistent thinking about market efficiency in legal culture (Khanna, 1998). Many prominent theorists believe that price influences are not associated with rational expectations about asset values. Alternative models developed by scholars suggest that prices deviate significantly from asset values, which may be related to the Titanic. The IMM, having been incorporated under the laws of New Jersey in 1893, had highly volatile asset prices. The management of the joint-stock company was changed in 1902 by the amended articles of association; a sign of an efficient capital market. The highly volatile company has invested in three huge ships due to encouraging efficient capital markets. The ship Titanic was among the three modern ships (Khanna, 1998). The volatility of the IMM company is indicated when the ship Titanic almost rammed the American Liner, New York, and when it finally hit a giant iceberg which led to the sinking. Despite the fact that the company that operated the Titanic had changed its name from International Navigation Company to International Mercantile Marine, the company perceived all available information in exactly the same way. The capital market is considered efficient as indicated when the IMM company was unable to determine the precise value of the ship after the disaster. Financial analysts have approximated the net worth of the sinking ship based on the company and preferred stock returns at the time the calamity occurred (Khanna, 1998). The cost of the sinking of the Titanic to the IMMAfter the unfortunate accident that made headlines, information on the cost of the Titanic, the cost of insurance, and the net loss was readily available to assist in market value calculations. For example, the procedure used by a financial analyst for the estimate was based entirely on stock information,.