Efficient Market Hypothesis

Filed Under: e by
Efficient Market Hypothesis
Holds that every piece of pertinent information is completely and instantly reflected in the market price of a security thereby leading to the assumption that investors will derive equilibrium return rate. This means that investors should avoid expectations of abnormal return (above market levels) through fundamental or technical analysis. The three forms are: weak form (where prices reflect past price information), strong form (where prices reflect insider information and all other information kinds), semi-strong form (where prices reflect public information).

Recommended for you:

  1. Efficient Capital Market
  2. Internally Efficient Market
  3. Educating Yourself About the Forex Market
  4. Operationally Efficient Market
Home / Glossary / e / Efficient Market Hypothesis