Efficient market theory Essay Example | Topics and Well Written Essays - 250 words

Efficient market theory - Essay Example This information may make them perceive that a stock may rise or its price may decline and they may take decisions accordingly. Efficient market theory is of the idea that individuals within the market have similar information and rejects the idea that different individuals may have different information. This even means that the investor that first receives the information will benefit more than those who have received the information later. For example: some investors of the stock market receives information that the sales of Procter & Gamble have increased by 100% as compared to the figures of last year. As a result of this the trader may end up purchasing the stock. If the trader had received this information later as compared to other traders, then the trader may not have purchased the stock at the right price since other traders may have already purchased the stock and the stock prices may have