A Modern Approach to the Efficient-Market Hypothesis
Market efficiency at least requires the absence of weak arbitrage opportunities, but this is not sufficient to establish a situation where the market is sensitive, i.e., where it "fully reflects" or "rapidly adjusts to" some information flow including the evolution of asset prices. By contrast, No Weak Arbitrage together with market sensitivity is sufficient and necessary for a market to be informationally efficient.
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"Efficient Market Hypothesis and Forecasting,"
CEPR Discussion Papers
3593, C.E.P.R. Discussion Papers.
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