Economics Stock Market Questions
The efficient market hypothesis (EMH) is a theory in economics that states that financial markets are efficient and that the prices of assets, such as stocks, reflect all available information. According to this hypothesis, it is not possible to consistently achieve above-average returns through active trading or by analyzing past price trends, as all relevant information is already incorporated into the current market prices. The EMH suggests that it is difficult to outperform the market consistently and that investors should instead focus on diversification and long-term investing strategies.