Question

Do you think markets are efficient and prices are “right”? bring arguments for your answer.

Answer 1

No, markets are not fully efficient and prices are not always right.

According to the efficient market hypothesis theory. Markets are fully efficient and prices reflects the all the information which are publicly available.

But here lies a small drawback that it varies from person to person how an individual will process the available information and what are their criteria to act on the available information. Different individuals uses different techniques and different criteria of valuation, which can term the stock undervalued or overvalued.

Also all the information which are publicly available doesn't get reflected into prices immediately. It takes time which cannot be determined.