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External efficiency

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External efficiency

External efficiency
A situation in which the price of a security reflects all available information in the market. There is disagreement as to extent to which it is possible. For example, the different forms of the efficient markets theory hold that this is possible to a greater or lesser extent, with the strong form of the EMT stating that even insider information is reflected immediately in a security's price. On the other hand, technical analysis and fundamental analysis each try to predict price trends, which implies that not all information is reflected in a security's price and therefore external efficiency does not exist. External efficiency is also known as price efficiency or pricing efficiency.


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The external efficiency is related to the system's outputs measured in terms of economic growth rates and more equitable income distributions.
This is crucial to both internal and external efficiency.
It will contribute to our external efficiency by enhancing customer accessibility and cutting response times.
 
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