Efficient Market Hypothesis (EMH)

Efficient Market Hypothesis (EMH),

How Do You Define Efficient Market Hypothesis (EMH)?

  • Effective market theory (EMH), also called effective market theory, assumes that stock prices reflect all information and that it is not possible for the alpha race to be permanent.

    • Effective Market Assessment (EMH) states that stock prices reflect all information.
    • The EMH assumes that the shares will be traded on the stock exchange at fair market prices.
    • Proponents of EMH believe that investors should invest in a low-cost passive portfolio.
    • Opponents of EMH believed that the market could be defeated and the shares could deviate from their fair value.

Literal Meanings of Efficient Market Hypothesis (EMH)


Meanings of Efficient:
  1. (Especially for systems or machines) Get maximum productivity with minimal effort or unnecessary expense.

Sentences of Efficient
  1. Fluorescent lamps convert electricity into light.

Synonyms of Efficient

well organized, methodical, systematic, structured, well planned, logical, coherent, well regulated, well run, well ordered, orderly, businesslike, systematized, streamlined, productive, effective, labour-saving, cost-effective, energy-efficient, energy-saving, fuel-efficient


Meanings of Market:
  1. Regular meetings of people to buy and sell food, livestock and other products.

  2. An area or environment in which business transactions take place.

  3. Advertise or promote (some)

Sentences of Market
  1. Farmers went to the market

  2. Job vacancies market

  3. This product is marketed under the name "Aspirin".

Synonyms of Market

sell, retail, offer for sale, put up for sale, vend, merchandise, trade, peddle, hawk


Meanings of Hypothesis:
  1. Acceptance or explanation based on limited evidence as a starting point for future investigations.

Sentences of Hypothesis
  1. Professional astronomers attacked it for popularizing unverified hypotheses.

Synonyms of Hypothesis

theory, theorem, thesis, conjecture, supposition, speculation, postulation, postulate, proposition, premise, surmise, assumption, presumption, presupposition