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Strong Form of the EMT
(redirected from Strong-Form Market Efficiency)

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Strong form of the EMT
Theory that market prices reflect all relevant publicly and privately available information. Defined by Eugene F. Fama in 1970.
Strong Form of the EMT
The most controversial form of the efficient markets theory on how markets work. It holds that the market efficiently deals with all information on a given security and reflects it in the price immediately. Even insider information is immediately reflected in security prices. Therefore, the model holds that technical analysis, fundamental analysis, and any speculative investing based on them are useless. Investors and academics disagree on how well the model works. See also: Weak form of the EMT, Semi-strong form of the EMT.
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Second, strictly speaking, our analysis holds only if the SVAR includes a variable that is efficient in the strong form of the EMH, and strong-form market efficiency is a stringent condition that is unlikely to be satisfied in the real world.
The efficient market hypothesis and identification in structural VARs by Sarno, Lucio; Thornton, Daniel L. / Federal Reserve Bank of St. Louis Review
 
 
 
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