Efficient Market Hypothesis (EMH)

The prices of securities fully reflect available information. Investors buying securities in an efficient market should expect to obtain an equilibrium rate of return. Weak-form EMH asserts that stock prices already reflect all information contained in the history of past prices. The semistrong-form hypothesis asserts that stock prices already reflect all past and current publicly available information. The strong-form hypothesis asserts that stock prices reflect all relevant information, including insider information.