EFFICIENT CAPITAL MARKET
EFFICIENT CAPITAL MARKET

Summary/Abstract: A market in which prices always “fully reflect” available information is called efficient. The most important issue regarding efficient market theory is that it is not possible to outperform the market over the long-term. An efficient capital market is characterized by the fact that any information is available to all investors or market participants, so stock prices always incorporate and reflect all relevant information. Due to this issue, the price of a stock should reflect the knowledge and expectations of all investors or market participants. Strictly speaking, the efficient market theory seems a utopian and unrealistic theoretical composition, but beyond Its critics, efficient market theory reaches profound meanings and revolutionized the field of investing.

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