EMH的弱形式表明，未来资产价格不能由过去几年的资产价格来预测，因为它们不构成新的信息。这种半强势形式表明，未来资产价格无法基于已发布的信息进行预测。这是因为公布的信息是由投资者获得的，这导致了流动资产价格的调整。强形式表示资产过程中反映了各种信息(来自私有或公共)(Fama, 1970)。然而，Jenson(1978)和Grossmanand Stiglitz(1980)将信息成本和交易成本纳入了市场效率的范围，从而提高了Fama(1970)的市场效率定义。Fame(1991)接着对市场效率进行了即兴的定义，指出市场效率服从连续体。
The concept of market efficiency is subject to debate in the field of financial economics. However the equally debatable is the definition of market efficiency. In the year 1970, Eugene Fama, an American economist had conducted a comprehensive examination of the concept of market efficiency. In his investigation, he framed the definition of efficient markets. It must be noted that he suggested an efficient market price which is associated with the full availability of information. This phenomenon was referred to as the Efficient-Market Hypothesis (EMH). According to EMH, the asset prices must ‘fully reflect’ all available information. The aim of the EMH is that since market prices are sensitive to new information and discount rate changes, it would be impossible to beat the market. Through his examination, Fama (1970) recognized three forms of EMH which are the weak form, semi-strong form and the strong form.
The weak form of EMH suggests that the future asset price could not be forecasted by the asset prices in the past years as they constitute no new information. The semi-strong form suggests that the future asset prices could not be predicted based on the published information. This is because the published information is acquired by the investors and this leads to the adjustment in the current asset prices. The strong form represents the idea that all kinds of information (either from private or public) is reflected in the asset process (Fama, 1970). However, the definition of market efficiency of Fama (1970) was enhanced by Jenson (1978) and Grossmanand Stiglitz (1980) as they incorporated the cost of information and the transaction costs within the purview of market efficiency. Fame (1991) then went on to improvise his market efficiency definition and noted that the market efficiency is subject to the continuum.