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Sagot :
According to the strong version of efficient market theory,
- Instantaneously, stock prices reflect both public and private information.
- There is no advantage for insiders when choosing investments.
What exactly is the efficient market theory?
- Share prices, according to the efficient market hypothesis (EMH) or theory, accurately reflect all available information.
- According to the EMH, equities trade on exchanges at their fair market value.
- EMH proponents contend that investing in a low-cost, passive portfolio is advantageous for investors.
What significance does the efficient market hypothesis have?
The efficient market hypothesis adheres to liberal economic theory and has significant political ramifications. According to the efficient market hypothesis, stock prices are always traded at a "fair" market value, negating the necessity for any form of government involvement in the market.
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