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 past information in prices), semistrong form (stock prices reflect all past and current publicly available information), and strong form (stock prices reflect all relevant information, including information not yet disclosed to the general public, such as insider information).
Barry Goldsmith
| APA | Barry Goldsmith. (2010). efficient market hypothesis. Retrieved September 23, 2026, from http://smartdefine.org/efficient_market_hypothesis/definitions/1152788 |
| Chicago | Barry Goldsmith. 2010. "efficient market hypothesis" http://smartdefine.org/efficient_market_hypothesis/definitions/1152788 (accessed September 23, 2026). |
| Harvard | Barry Goldsmith 2010, efficient market hypothesis, Smart Define, viewed 23 September, 2026, <http://smartdefine.org/efficient_market_hypothesis/definitions/1152788>. |
| MLA | Barry Goldsmith. "efficient market hypothesis" 21 October 2010. Web. 23 September 2026. <http://smartdefine.org/efficient_market_hypothesis/definitions/1152788> |