A market anomaly refers to a situation where the price of an asset deviates from its expected or fair value, often contradicting the principles of efficient market hypothesis (EMH). The EMH posits that financial markets are "informationally efficient," meaning that asset prices fully reflect all available information. However, market anomalies suggest that there are instances where assets are mispriced and do not reflect all relevant information, leading to opportunities for investors to achieve abnormal returns.
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