A Study of the Economic Impact of the Sinking of the Titanic

Table of contents

The Titanic: A Test of the Efficiency of U.S. Capital Markets

The effectiveness of the stock markets involves the investigation of how much, how fast, and how accurately the available data is incorporated into security prices. Financial economists classify the efficiency of capital markets into different categories based on the meaning of available information on security prices. Empirical evidence from the study of the 1912 sinking Titanic ship and its effects to the International Mercantile Marine Company, its parent firm, is constructive in the perception of the efficiency of capital markets. The effectiveness of the U.S. stock markets is, therefore, analyzed through the study of the theories in the economics literature about the Titanic.

IMM and the Titanic

The sinking of the Titanic ship in 1912 had a great impact on the company constructed the ship, a representation of the whole economy. The tumbling of the liner may be regarded as a crashing of the stock of the company and its recovery has not been less dramatic than that of the rest of the market. The formal efforts of the IMM Company after the sinking of the Titanic brings an idea of a strong capital market of the United States as a legitimately debatable issue. In many ways, the existing culture of the U.S. acts as if financial analysts proved the state of the market several decades ago. Sensibly, a gulf has developed between the current economics literature and the persistent conception regarding market efficiency in the legal culture (Khanna, 1998).

Many eminent theorists perceive pricing influences not to be associated with rational expectations about asset values. Alternative models developed by scholars suggest that prices make significant departures from the asset values, which can be related to the Titanic. The IMM, companies involves the release of public information to be used by lawyers and investors as illustrated.

Before the acquisition, stock prices goes up, indicating an act of dishonesty. The early move however, is an indication of strong market efficiency (Goetzmann, 2016).

An efficient capital market is tested when a research on the investment in a market is carried out, and the results reveal that no single investor attains greater profitability or loss than other investors with the same amount of invested funds. An efficient market hypothesis requires equality in the sharing of profits due to the aspect of equal sharing of information. The incidence of the sinking of the Titanic reveals the efficiency of the state of the capital markets in America. Information from a journal on the untold story of the Titanic illustrates that the loss in the stock value was steady with the average loss to the company in charge of the Titanic vessel, the parent company of the Titanic (Goetzmann, 2016).

As illustrated, market participants are obliged to equal possession of information; thus, they can only achieve identical returns. According to the journal, the procedure in the calculation of the impact of the Titanic sinking on the market value is a test that apparently qualifies to ascertain the competence of capital markets of the United States of America.


An efficient capital market is composed of investors who are of equal mutual relation. No investor is entitled to beat the market. An efficient capital market is also defined by the availability and accuracy of information about the securities and their prices. The calamity that hit the Titanic ship in 1912 was a chance to determine the efficiency of the Capital markets of America during the century. Information obtained from the study is significant enough to be used in the current investment community.


  1. Goetzmann, W. (2016). An Introduction to Investment Theory. Viking.som.yale.edu.

  2. Retrieved 17 March 2016, from http://viking.som.yale.edu/will/finman540/classnotes/class8.html

  3. Khanna, A. (1998). The “Titanic”: The Untold Economic Story (5th ed., pp. 16-17). CFA

  4. Institute. Retrieved from http://www.jstor.org/stable/4480105


Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with MyhomeworkGeeks
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Business and administrative studies
Customer 452773, February 23rd, 2023
Business and administrative studies
Thank you
Customer 452773, March 19th, 2023
Business and administrative studies
Excellent work ,always done early
Customer 452773, February 21st, 2023
The support team was late responding , my paper was late because the support team didn't respond in a timely manner. The writer of the paper finally got it right but seems there was a problem getting the revisioin to me.
Customer 452773, April 7th, 2024
Social Work and Human Services
Although it took 2 revisions I am satisfied but I did receive it late because of that.
Customer 452603, March 25th, 2021
Thank you!!! I received my order in record timing.
Customer 452551, February 9th, 2021
Don't really see any of sources I provided, but elsewise its great, thank you!
Customer 452697, May 8th, 2021
Criminal Justice
This has been the greatest help while I am recovering from an illness. Thank your team so much.
Customer 452671, May 2nd, 2021
Looks great and appreciate the help.
Customer 452675, April 26th, 2021
Human Resources Management (HRM)
excellent job
Customer 452773, June 25th, 2023
ACC/543: Managerial Accounting & Legal Aspects Of Business
Customer 452773, January 10th, 2024
Thank youuuu
Customer 452729, May 30th, 2021
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp