Efficient market

Imagine that there is a big room where people buy and sell different things, like toys, candy, and books. Now, imagine that all of these people have really good information about the things they are buying and selling.

This means that everyone knows exactly what they are buying or selling, how much it's worth, and whether it's a good deal or not. This also means that no one can make a profit by knowing something that other people don't know.

So, if you want to buy a toy, you will pay the right price for it because everyone in the room knows the value of the toy, and no one will sell it to you for more money than it's worth.

This is what we call an efficient market. It's a market where everyone has all the important information they need to make good decisions about what to buy and sell.

In the stock market, an efficient market means that all the buyers and sellers have access to the same information, and they all use that information to make the best decisions they can. This means that the price of a stock reflects all of the available information about the company, and there is no way to make a profit simply by knowing something that other investors don't know.

Overall, an efficient market is a fair market where everyone has the same information and opportunities to make good decisions.