What characterizes an efficient market in terms of information?

An efficient market is characterized by the principle that all available information is reflected in security prices. This means that current stock prices accurately incorporate all known information, including public news, earnings reports, economic indicators, and other relevant data. As a result, it becomes incredibly difficult for investors to consistently achieve returns that exceed average market returns on a risk-adjusted basis because any new information that might affect a security's value is quickly assimilated into its price.

In an efficient market, prices adjust rapidly to new information, allowing for a reflection of the true value of securities based on available data. This characteristic leads to the implication that it is nearly impossible to "beat the market" consistently through analysis or timing strategies, as the market is adept at pricing in new information.