  in finance, the efficient-market hypothesis (emh) asserts that financial markets are "informationally efficient". in consequence of this, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made. there are three major versions of the hypothesis: "weak", "semi-strong", and "strong". the weak form of the emh claims that prices on traded assets (e.g., stocks, bonds, or property) already reflect all past publicly available information. the semi-strong form of the emh claims both that prices reflect all publicly available information and that prices instantly change to reflect new public information. the strong form of the emh additionally claims that prices instantly reflect even hidden or "insider" information. critics have blamed the belief in rational markets for much of the late-2000s financial crisis. in response, proponents of the hypothesis have stated that market efficiency does not mean having no uncertainty about the future, that market efficiency is a simplification of the world which may not always hold true, and that the market is practically efficient for investment purposes for most individuals. ==joint hypothesis problem== the joint hypothesis problem says that it is never possible to disprove market efficiency. a test of market efficiency must include some model for how prices may be set efficiently. then actual prices can be examined to see whether this holds true. usually this fails and then this supports the case that markets are not efficient. the joint hypothesis problem says that, when this happens, it shows that the model is not complete. there are some factors that are not accounted for. going further, such factors must have a rational basis, because that i
1900_introductions Behavioral_finance Economic_efficiency Economic_theories Financial_economics Financial_markets