Market Efficiency (2025 Level I CFA Exam – Equity – Module 3)

Learn Market Efficiency for the 2025 CFA Level I Exam. This lecture explains Eugene Fama’s Efficient Market Hypothesis (EMH) and its implications for analysts, investors, and portfolio managers.
What you’ll learn
- Meaning and importance of market efficiency
- EMH by Eugene Fama: weak, semi-strong, strong forms
- Market vs intrinsic value
- Factors affecting efficiency
- Market anomalies and behavioral finance
- Active vs passive portfolio management
LOS covered
- Describe market efficiency and related concepts
- Contrast market and intrinsic value
- Explain factors affecting efficiency
- Contrast weak, semi-strong, strong forms
- Describe anomalies and behavioral finance relevance
CFA Prep Packages:
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Level II: https://analystprep.com/shop/learn-practice-package-for-level-ii-of-the-cfa-exam-by-analystprep/
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Prep Packages for the FRM Program:
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Topic 5 – Equity Investments
Module 3 – Market Efficiency
0:00 Introduction and Learning Outcome Statements
6:39 LOS : Describe market efficiency and related concepts, including their importance to investment practitioners.
15:12 LOS : Contrast market value and intrinsic value.
19:19 LOS : Explain factors that affect a market’s efficiency.
21:55 LOS : Contrast weak-form, semi-strong-form, and strong-form market efficiency.
31:22 LOS : Explain the implications of each form of market efficiency for fundamental analysis, technical analysis, and the choice between active and passive portfolio management.
36:37 LOS : Describe market anomalies.
52:25 LOS : Describe behavioral finance and its potential relevance to understanding market anomalies.
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