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An asset market is information-efficient if asset prices fully reflect all currently available information on future asset returns. New information is incorporated quickly and correctly into asset prices through market trading.
the idea that markets adjust rapidly enough to eliminate profit opportunities immediately.
An assumption, underpinning modern finance theory, that all available 'information' about a commodity (a share or other investment) is reflected in its price. The current price, therefore, is seen as the best forecast of value. When new information does emerge, the price will move accordingly.
In general the 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 information of past prices), semi-strong form (stock prices reflect all publicly available information) and strong form (stock prices reflect all relevant information including insider information).
Whereby an investor cannot use information to stimulate superior performance, because all information on a company is reflected in its share price as soon as it comes to hand.
The efficient market hypothesis is a controversial and often-disputed theory that states that fundamental and / or technical analysis cannot lead to excess market returns because markets are fully efficient and as such incorporate all relevant information about every security.
The assertion that information is of no value since all public information on a Company is immediately reflected in its share price. in such a market, an investor can attain no more, no less, than a fair return for the risks undertaken. Forms are weak, semi-strong, and strong.
In finance, the efficient market hypothesis (EMH) asserts that financial markets are "efficient", or that prices on traded assets, e.g., stocks, bonds, or property, already reflect all known information and therefore are unbiased in the sense that they reflect the collective beliefs of all investors about future prospects. Professor Eugene Fama at the University of Chicago Graduate School of Business developed EMH as an academic concept of study through his published Ph.D. thesis in the early 1960s at the same school.