The prices of traded assets, such as stocks and bonds, reflect all publicly available information.

Question

Quizplus · Accepted Answer

This statement is known as the Efficient Market Hypothesis (EMH), which suggests that markets are efficient and all publicly available information is already reflected in asset prices. While there is debate among economists about the extent to which markets are truly efficient, many studies have supported the idea that market prices do indeed incorporate public information.

The Prices of Traded Assets, Such as Stocks and Bonds