A market is efficient if prices of financial instruments quickly reflect new public information made available to traders.

Question

Quizplus · Accepted Answer

Efficient markets are characterized by prices of financial instruments quickly reflecting new information made available to traders. This is because all information, both public and private, is immediately reflected in the prices of financial instruments, making it impossible to outperform the market consistently over time.

A Market Is Efficient If Prices of Financial Instruments Quickly