A very high degree of capital market efficiency   a. mispricing never occurs.     b. means share prices always correctly reflect all available information.     c. the capital markets anticipate and price correctly all possible future payoffs and states of the world.     d. means share prices react quickly, completely, and without bias once new value-relevant information is available to the market.

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.