Financial Dictionary

This dictionary contains:
24549
financial terms

Efficiency




Efficiency

The degree and speed with which a market accurately incorporates information into prices.

RELATED TERMS
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Market
1) The total demand for a good. 2) The set of all actual and potential buyers of a good or service. 3) The place where people buy and sell. 4) The process by which buyers and sellers of goods, services and factors of production interact to determine prices and quantifies.



SIMILAR TERMS
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Efficient Asset A. Inv., S.A., SICAV
Efficient Asset A. Inv., S.A., SICAV is a Spanish company listed at Madrid Stock Exchange. Its business activity is capital investment.

Efficient capital market
A market in which new information is very quickly reflected accurately in share prices.

Efficient diversification
The organizing principle of portfolio theory, which maintains that any risk-averse investor will search for the highest expected return for any particular level of portfolio risk.

Efficient frontier
The combinations of securities portfolios that maximize expected return for any level of expected risk, or that minimizes expected risk for any level of expected return. Pioneered by Harry Markowitz.

Efficient market
Market in which prices correctly reflect all relevant information.

Efficient Market Hypothesis
States that all relevant information is fully and immediately reflected in a security's market price, thereby assuming that an investor will obtain an equilibrium rate of return.

Efficient Markets Theory (EMT)
Principle that all assets are correctly priced by the market, and that there are no bargains.

Efficient portfolio
A portfolio that provides the greatest expected return for a given level of risk or, equivalently, the lowest risk for a given expected return.

Efficient set
Graph representing a set of portfolios that maximize expected return at each level of portfolio risk.

Efficient surface
The set of portfolios that result from investor's preference for higher means, lower variance and higher (positive) skewness. The efficient surface is analogous (in three dimensions, mean, variance and skewness) to the efficient frontier (in two dimensions, mean and variance).



PREVIOUS AND NEXT TERMS
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Effective rate
A measure of the time value of money that fully reflects the effects of compounding.

Effective sale
A sale based on the most recent round-lot price, which determines the price of the next odd lot. The difference between the last round-lot price and the odd-lot price is the odd-lot differential.

Effective spread
The gross underwriting spread adjusted for the impact that a common stock offering's announcement has on the firm's share price.

Effective tax rate
The net rate a taxpayer pays on income that includes all forms of taxes. It is calculated by dividing the total tax paid by taxable income.

Effective yield
Yield or return on a short-term investment after adjustment for the change in exchange rates over the period of concern.

Efficiency

Efficient capital market
A market in which new information is very quickly reflected accurately in share prices.

Efficient diversification
The organizing principle of portfolio theory, which maintains that any risk-averse investor will search for the highest expected return for any particular level of portfolio risk.

Efficient frontier
The combinations of securities portfolios that maximize expected return for any level of expected risk, or that minimizes expected risk for any level of expected return. Pioneered by Harry Markowitz.

Efficient market
Market in which prices correctly reflect all relevant information.

Efficient Market Hypothesis
States that all relevant information is fully and immediately reflected in a security's market price, thereby assuming that an investor will obtain an equilibrium rate of return.

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This dictionary contains 24549 terms.







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