False Market


DEFINITION of 'False Market'

A market where prices are manipulated and impacted by erroneous information, preventing the efficient negotiation of prices. These types of markets will often be marred by volatile swings because the true value of the market is clouded by the misinformation.

BREAKING DOWN 'False Market'

When investors use inaccurate information to guide their decisions, they tend be irrational and over- or underreact to news. The illogical decisions made by these investors skew the market, causing the true value of a security to be misrepresented

  1. Strong Form Efficiency

    The strongest version of market efficiency. It states all information ...
  2. Semi-Strong Form Efficiency

    A class of EMH (Efficient Market Hypothesis) that implies all ...
  3. Weak Form Efficiency

    One of the different degrees of efficient market hypothesis (EMH) ...
  4. Inefficient Market

    A theory which asserts that the market prices of common stocks ...
  5. Manipulation

    The act of artificially inflating or deflating the price of a ...
  6. Efficient Market Hypothesis - EMH

    An investment theory that states it is impossible to "beat the ...
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