There is a lot of talk about the "efficient capital market". Market
efficiency describes the operating characteristics of the capital
market. These are of two types:
* Operationally or internally efficient. In which an investor can do
transactions as cheaply as possible. This would include brokerage,
commissions, and other charges.
* Pricing or externally efficient. In which an investor can expect
that stock prices at all times reflect all available information that
is relevant to the evaluation of the stocks.
A further exposition for a better understanding maybe read at:
http://www.narachinvestment.com/market_efficiency.htm
(You may click on the link above or type the complete URL address into
your browser)
