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Published On:Wednesday, 4 January 2012
Posted by Muhammad Atif Saeed

Informationally Efficient Market

A theory, which moves beyond the definition of the efficient market hypothesis, that states that new information about any given firm is known with certainty, and is immediately priced into that company's stock. 

Explanation:
Before any big news release, a company's stock may change in value, due to investors and traders speculating on the stock's intrinsic value after the news release. In an informationally efficient market, there will be little to no price change after the news release comes out. Under this hypothesis any changes in stock price, after a news release, would be due to the interpretation of the news by individual analysts.

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Posted by Muhammad Atif Saeed on 11:01. Filed under , . You can follow any responses to this entry through the RSS 2.0. Feel free to leave a response

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I am doing ACMA from Institute of Cost and Management Accountants Pakistan (Islamabad). Computer and Accounting are my favorite subjects contact Information: +923347787272 atifsaeedicmap@gmail.com atifsaeed_icmap@hotmail.com

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