An efficient financial market processes the information available to investors and incorporates it into the prices of
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An efficient financial market processes the information available to investors and incorporates it into the prices of securities. Market efficiency has two general implications. First, in any given time period, a stock’s abnormal return depends on information or news received by the market in that period. Second, an investor who uses the same information as the market cannot expect to earn abnormal returns. In other words, systems for playing the market are doomed to fail.
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