Secured loans
Used in the context of general equities. Change the price or volume levels at
which a stock trades through artificial, extraordinary, or non-fundamental demand
or supply (i.e., corporate repurchase).
Efficiency
The degree and speed to which a market accurately incorporates information into
prices.
Efficient capital market
A market in which new information is very quickly reflected accurately in share
prices.
Efficient diversification
The organizing principle of modern portfolio theory, which maintains that any risk-
averse investor will search for the highest expected return for any 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 Hypothesis
In general the hypothesis states that all relevant information is fully and
immediately reflected in a securitys market price thereby assuming that an
investor will obtain an equilibrium rate of return. In other words, an investor
should not expect to earn an abnormal return (above the market return) through
either technical analysis or fundamental analysis. Three forms of efficient market
hypothesis exist: weak form (stock prices reflect all information of past prices),
semi-strong form (stock prices reflect all publicly available information) and
strong form (stock prices reflect all relevant information including insider
information).
Efficient portfolio
A portfolio that provides the greatest expected return for a given level of risk (i.e.
standard deviation), or equivalently, the lowest risk for a given expected return.
