what is meant of Efficiency of the Foreign Exchange Market?

2008-05-03 12:49 am
can anyone tell me in details?

回答 (1)

2008-05-03 1:00 am
✔ 最佳答案
Efficiency in finance means different degree of INFORMATION is being reflected and digested in the market prices of the financial assets. There are 3 forms of market efficiency: weak form efficiency means all PAST information has been reflected in the market prices, second form efficiency means all PAST and PUBLIC AVAILABLE information has been digested in the market and strong form efficiency means all PAST, PUBLIC AVAILABLE and INSIDER information have been completely reflected in the maket prices. In stock market, there are many insider information only available to small group of people but not to everybody, hence, some people can trade on INSIDER information and make money on this, even though this is illegal in HK. However, there are many partipicants in 24-hour operating foreign exchange market which is strong form efficient that even insider information can easily absorbed in the market. I can say foreign exchange market is very efficient in that sense.


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