Definition for : Efficient market hypothesis
The efficient Market hypothesis states that Technical analysis has no practical Value nor do investing tricks, for example the notion that "if a Stock rises three consecutive times, buy it; if it declines two consecutive times, sell it". Similarly, the efficient Market hypothesis states that models relating Future returns to Interest rates, Dividend yields, the Spread between short- and long-term Interest rates or other parameters are equally worthless.
(See Chapter 15 The financial markets of the Vernimmen)
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