Consider a game that involves the tossing of a fair coin.The winner is the individual who calls the outcome correctly, the loser obviously called the wrong outcome.The theory of efficient markets would say:

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The theory of efficient markets suggests that all available information is reflected in the current market price. In the case of the game involving the fair coin, the key information necessary for evaluating the expected payoff would be the probabilities of each outcome, which are equal (50%). The outcomes of previous tosses or the skill of the opponent would not affect the expected payoff and are therefore irrelevant. Additionally, while some events may have an element of luck involved, their probabilities can still be evaluated based on past data or mathematical models.

Consider a Game That Involves the Tossing of a Fair