A Description of Efficient Capital Markets An efcient capital market is one in which stock prices fully reflect available information. The EMH has implications for investors and firms. Since information is reflected in security prices quickly,knowing information when it is released does an investor no good. - Firms should expect to receive the fair value for securities that they sell.Firms cannot profit from fooling investors in an efficient market. 55 A Description of Efficient Capital Markets A Description of Efficient Capital Markets ƒ An efficient capital market is one in which stock prices fully reflect available information. ƒ The EMH has implications for investors and firms. – Since information is reflected in security prices quickly, knowing information when it is released does an investor no good. – Firms should expect to receive the fair value for securities that they sell. Firms cannot profit from fooling investors in an efficient market