Prices in efficient capital markets fully reflect all available information and rapidly adjust to new information.

Question

Quizplus · Accepted Answer

According to the efficient market hypothesis, prices in efficient capital markets reflect all available information and adjust quickly to new information. This means that any news or information that becomes available to the public will be immediately reflected in the price of a security, making it impossible to consistently outperform the market without insider information.

Prices in Efficient Capital Markets Fully Reflect All Available Information