DEFINITION of 'Price Efficiency'
The premise that asset prices are efficient, to the extent that they already factor in or discount all available information. The theory of price efficiency follows from the efficient market hypothesis, which holds that since markets are efficient, it is nearly impossible for investors to "beat the market" on a consistent basis.
BREAKING DOWN 'Price Efficiency'
The three versions of the efficient market hypothesis (EMH) are all based on varying assumptions of price efficiency. The weak form of EMH claims that the prices of publiclytraded assets already reflect all available information, and past prices are of little value in predicting future trends. The semistrong version of EMH holds that while prices are efficient, they react instantaneously to new information, while the strong version of EMH maintains that asset prices reflect not just public knowledge, but private insider information as well.

Efficient Market Hypothesis  EMH
An investment theory that states it is impossible to "beat the ... 
SemiStrong Form Efficiency
A class of EMH (Efficient Market Hypothesis) that implies all ... 
Informationally Efficient Market
A theory, which moves beyond the definition of the efficient ... 
Allocational Efficiency
A characteristic of an efficient market in which capital is allocated ... 
Fractal Markets Hypothesis (FMH)
An alternative investment theory to Efficient Market Hypothesis ... 
Overreaction
A market hypothesis stating that investors and traders react ...

Active Trading
What Is Market Efficiency?
The efficient market hypothesis (EMH) suggests that stock prices fully reflect all available information in the market. Is this possible? 
Active Trading Fundamentals
Efficient Market Hypothesis: Is The Stock Market Efficient?
Deciding whether it's possible to attain aboveaverage returns requires an understanding of EMH. 
Economics
The Efficient Market Hypothesis: Settling the Great Debate
An understanding of neuroscience and the decisionmaking process provides a resolution to the decadesold debate between proponents and critics of the Efficient Market Hypothesis. 
Economics
Explaining Economic Efficiency
Economic efficiency is achieved when every resource is optimally allocated to minimize waste and best serve each person in that economy. 
Economics
Explaining Efficiency
Efficiency refers to the ability to make something with the fewest resources possible. 
Economics
Investopedia Explains Fractal Markets Theory
Fractal Market Hypothesis has emerged as an alternative to longstanding economic theories due to its ability to explain investor behavior during crises. 
Fundamental Analysis
Efficiency Ratio
There are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit. Business managers use these ratios to determine how well they are operating ... 
Investing Basics
Is Stock Picking A Myth?
Find out if mutual fund managers can successfully pick stocks or if you're better off with an index fund. 
Trading Systems & Software
Mechanical Investing Not A Golden Key
Direct paths to wealth are getting narrower, fewer and may be locked up tight. 
Investing Basics
Modern Portfolio Theory vs. Behavioral Finance
Modern portfolio theory and behavioral finance represent differing schools of thought that attempt to explain investor behavior. Perhaps the easiest way to think about their arguments and positions ...

What does the Efficient Market Hypothesis have to say about fundamental analysis?
Find out what the efficient markets hypothesis has to say about fundamental analysis and how recent finance research has ... Read Answer >> 
What is an efficient market and how does it affect individual investors?
When people talk about market efficiency they are referring to the degree to which the aggregate decisions of all the market's ... Read Answer >> 
Does a high efficiency ratio mean that the company is profitable?
Understand the variety of efficiency ratios and why a high efficiency ratio does not necessarily mean a company is operating ... Read Answer >> 
Which financial ratios are considered to be efficiency ratios?
Learn about efficiency ratios, what financial ratios are considered efficiency ratios, and how to calculate three different ... Read Answer >> 
What is the difference between efficiency ratios and profitability ratios?
Learn about efficiency and profitability ratios, what these ratios measure and the main difference between efficiency and ... Read Answer >> 
What do efficiency ratios measure?
Learn about efficiency ratios, what they measure, how to calculate commonly used efficiency ratios and how to interpret these ... Read Answer >>