The Efficient Market Hypothesis tells us that stocks are "fairly priced" (i.e. not systematically over- or under-valued). That is, stock prices reflect all information that is already known about them. This is because any information from current or past events are already "absorbed" by the market. What is this "asborption" of information by the market supposed to mean? The market is comprised of its participants, buyers and sellers. I would also like to ask if the Efficient Market Hypothesis is built upon the following premises:
All market participants have perfect information at all times, i.e. they know the operations of the companies listed on the stock exchange fully well and that they are also well-equipped with the financial knowledge required to interpret any economic news that may affect the performance of the listed companies.
All market participants respond rationally and make decisions using the marginalist principle.
Market participants are able to assess the circumstances readily at any one time and are able to respond to any new economic information (e.g. government macroeconomic policy changes, changes to corporate earnings etc.) instantly.
I just learnt about this concept and so I would just wish to seek clarification on it.