Stock market efficiency

Stock market efficiency:

Efficient market: prices of securities in the market should fully and quickly reflect all available information, which means that market prices should be close to intrinsic values (market in equilibrium)

Levels of market efficiency

Weak-form efficiency - stock prices already reflect all information contained in the history of past price movements (only past prices, volumes, and returns).

Semi strong-form efficiency - stock prices already reflect all publicly available information in the market (only past publicly available information).

Strong-form efficiency - stock prices already reflect all available information in the market, including inside information (all public and private information).