Holicent
VIP Contributor
Security market efficiency is the ability of a security market to generate returns on invested capital, given that capital is invested in the security market. Security market deals with the relationship between the prices of securities and the return on investment in those securities. This is how well a security's price reflects its intrinsic value and how much it should cost for investors to buy that security. If a security's price doesn't reflect its intrinsic value, then investors will not be able to get as much return on their investment as they would have if they had invested in another type of asset or security.
It's also the amount by which a security's price exceeds its fair value in an efficient market (where all information is publicly available). Inaddition, it's the ability of investors to earn a return on their investments. It is important because it affects the amount of risk taken by investors and, therefore, how much they can invest in a security. Security returns are the total amount earned by an investor on his or her investment. Security returns should be calculated as a percentage of the value of the security, not just its market price.
It's also the amount by which a security's price exceeds its fair value in an efficient market (where all information is publicly available). Inaddition, it's the ability of investors to earn a return on their investments. It is important because it affects the amount of risk taken by investors and, therefore, how much they can invest in a security. Security returns are the total amount earned by an investor on his or her investment. Security returns should be calculated as a percentage of the value of the security, not just its market price.
