Efficiency of MarketLike technical analysis, market efficiency is a controversial part of finance. In an efficient market security prices are based on the available information so as to offer and expected return consistent with their level of risk.Types of Efficiency
The two types of efficiency are operational efficiency and informational efficiency. Operational efficiency is a measure of how well things function in terms of speed of execution and accuracy. At a stock exchange, operational efficiency is measured by such factors as the number of orders lost or filled incorrectly and the elapsed time between the receipt of an order and its execution.
Informational efficiency is a measure of how quickly and accurately the market reacts to new information. New data constantly enter the marketplace via economic reports, company announcements, political statements, or public opinion surveys, to name a few sources.
The two types of efficiency are operational efficiency and informational efficiency. Operational efficiency is a measure of how well things function in terms of speed of execution and accuracy. At a stock exchange, operational efficiency is measured by such factors as the number of orders lost or filled incorrectly and the elapsed time between the receipt of an order and its execution.
Informational efficiency is a measure of how quickly and accurately the market reacts to new information. New data constantly enter the marketplace via economic reports, company announcements, political statements, or public opinion surveys, to name a few sources.
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