Efficient Market Hypothesis

(redirected from Efficient markets)
Also found in: Wikipedia.

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).

Efficient Market Theory

A controversial model on how markets work. It states that the market efficiently deals with all information on a given security and reflects it in the price immediately. The model holds that technical analysis, fundamental analysis, and any speculative investing based on them are useless. The model has three forms: weak efficiency, which holds that technical analysis is ineffective, semi-strong efficiency, which holds that fundamental analysis is ineffective, and strong efficiency, which states that even insider information is immediately reflected in the security prices. Investors and academics disagree on how well the model works.
References in periodicals archive ?
Its particular focus is on creating stable and efficient markets for recycled materials and products and removing the barriers to waste minimization, re-use and recycling.
We must create incentives for people to invest in more efficient technology, increase their skills, and organize efficient markets.
Whether speculative bubbles sometimes go too far and implode, as bubbles do, or are simply reactions of efficient markets to fundamentals (albeit in some cases, to governments changing the rules), seems to me to rest on one's view of the evidence to some extent, but also on prior beliefs.
The concept of efficient markets tells us that when new public information comes out, it should be incorporated into the stock prices relatively quickly," according to Khanna.
ISE is founded on the principle that technology and competition create better, more efficient markets for investors and consists of an options exchange, a stock exchange and an alternative markets platform.
ISE Holdings) is the parent company of International Securities Exchange, LLC (ISE), an innovative securities market founded on the principle that technology and competition create better, more efficient markets for investors.
The International Securities Exchange, LLC (ISE) is an innovative securities market, founded on the principle that technology and competition create better, more efficient markets for investors.
The International Securities Exchange (ISE) is an innovative securities market, founded on the principle that technology and competition create better, more efficient markets for investors.
The administrative support services provided by Addx will assist EIA in its ability to provide policy-independent data, forecasts and analyses to promote sound policy making, efficient markets and public understanding regarding energy and its interaction with the economy and environment.
The arrival of real estate on the Internet does not mean that the historically inefficient real estate market is now an efficient market characterized by full-disclosure and perfect information.
In a series of disarmingly simple arguments George Cooper challenges the core principles of today's economic orthodoxy, explaining why financial markets do not obey the efficient market principles described in today's economic textbooks but are instead inherently unstable and habitually crisis prone.

Full browser ?