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Do Financial Markets Immediately Provide All Relevant Information?

Do Financial Markets Immediately Provide All Relevant Information?
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Commentary
It is widely held that financial asset markets always fully reflect all available and relevant information, and that adjustment to new information is virtually instantaneous. This way of thinking is also known as the efficient market hypothesis (EMH), and is closely linked with the rational expectations hypothesis (REH), which postulates that market participants are at least as good at price forecasting as any model that a financial market scholar can come up with, given the available information.
Frank Shostak
Frank Shostak
Author
Frank Shostak, Ph.D., is an associated scholar of the Mises Institute. His consulting firm, Applied Austrian School Economics, provides in-depth assessments and reports of financial markets and global economies. He has taught at the University of Pretoria and the Graduate Business School at Witwatersrand University.