Efficient Market Hypothesis

Inefficiencies in the Market
Inefficiencies in the market occur when investors fail to recognize the true value or risks associated with a particular stock or bond. These inefficiencies contradict the Efficient Market Hypothesis (EMH), which posits that current prices reflect all available information about securities. However, discrepancies between theory and practice provide opportunities for arbitrageurs to profit from market inefficiencies

Accounting Terms Lexicon

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