Which concept describes prices that incorporate all information, both public and nonpublic?

The concept that describes prices incorporating all information, including both public and nonpublic information, is the Strong Efficient Market Hypothesis (EMH). This hypothesis posits that current stock prices reflect all available information, which includes insider or private information that may not be accessible to the general public.

In the context of the Efficient Market Hypothesis, the three forms—weak, semi-strong, and strong—each handle the assimilation of information differently. The weak form suggests that past price movements are reflected in current prices, the semi-strong form indicates that all publicly available information is reflected, while the strong form asserts that all possible information, whether publicly available or nonpublic, is accounted for in stock prices. Thus, if markets are strong-form efficient, it implies that even insider information cannot give an investor an advantage in earning higher returns because that information is already priced into the stock.

Understanding this framework is key for evaluating market dynamics and informs decisions in both trading and investment strategy.