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Efficient Market Hypothesis
(redirected from Efficient market theory)

    Also found in: Acronyms, Wikipedia 0.04 sec.
Efficient Market Hypothesis
States that all relevant information is fully and immediately reflected in a security's market price, thereby assuming that an investor will obtain an equilibrium rate of return. In other words, an investor should not expect to earn an abnormal return (above the market return) through either technical analysis or fundamental analysis. Three forms of efficient market hypothesis exist: weak form (stock prices reflect all past information in prices), semistrong form (stock prices reflect all past and current publicly available information), and strong form (stock prices reflect all relevant information, including information not yet disclosed to the general public, such as insider information).


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According to efficient market theory, it's nearly impossible to outperform securities markets over time, whether it's with one class of assets or many.
Convertible bonds proving better value in bear market. (Wall Street ... by Cole, Benjamin Mark / Los Angeles Business Journal
Here Kuttner seems ignorant of the central concept that stock prices reflect available information at a point in time and change with new information; he seems to think the Efficient Market Theory argues that stock prices are "accurate.
Everything for Sale: The Virtues and Limits of Markets by Lee, Susan / Reason
According to the popular Efficient Market Theory, stock price variations are random and, as such, are not predictable.
Irrational Investor Behavior Data Used To Predict Short-Term Stock ... by Business Wire
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