Pricing efficiency refers to a market where prices at all times fully reflect all available information that is relevant to the valuation of securities.

Question

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Pricing efficiency is a fundamental concept in financial markets, which assumes that prices of securities incorporate all publicly available information. This means that investors cannot achieve superior returns by using public information, as the prices of the securities will always reflect the news and events that have occurred in the market. However, pricing efficiency does not imply that prices are always correct, as there can be unexpected events or non-public information that could impact prices.

Pricing Efficiency Refers to a Market Where Prices at All