Market efficiency refers to the idea that financial markets quickly incorporate all available information into asset prices. This means that it is difficult for investors to consistently achieve higher returns than the overall market, as any new information is rapidly reflected in stock prices. There are three forms of market efficiency: weak, semi-strong, and strong. The weak form suggests that past price movements cannot predict future prices, while the semi-strong form asserts that all publicly available information is already included in stock prices. The strong form claims that even insider information is reflected in prices, making it impossible to gain an advantage.