Assume That Markets Are Semi-Strong Form Efficient

question 293

Multiple Choice

Assume that markets are semi-strong form efficient. Suppose, then, that during a trading day, important new information is released for the first time concerning a certain company. This information indicates that one of the firm's oil fields, previously thought to be very promising, just came up dry. How would you expect the price of a share of stock to react to this information?

• A) The value of a share will fall over an extended period of time as investors begin to sell shares in the company.
• B) The value of a share will drop immediately to a price that reflects the value of the new information.
• C) The value of a share will fall below what is considered appropriate because of the decreased demand for the shares, but eventually the price will rise to the correct level.
• D) The value of a share will rise over a long period of time as investors sell the stock.
• E) The stock price will not change since this type of information has no impact in markets that are semi-strong form efficient.

Describe the consequences of substance use during pregnancy, including alcohol, drugs, and prescriptions, on fetal health and development.

Understand the role and importance of prenatal care, nutrition, and supplements in promoting healthy fetal development.

Discuss the impact of prenatal exposure to substances like marijuana, cocaine, methadone, and heroin on offspring health and behavior.

Evaluate the historical context and current understanding of the effects of specific drugs (e.g., thalidomide, tetracycline) on pregnancy and fetal development.

---

Definitions:

Portfolio Beta

An evaluation of a portfolio's systemic risk in relation to the entire market's volatility.

Systematic Risk

The danger that applies to the whole market or a section of the market, which cannot be mitigated by diversifying investments.

Risk Premium

The additional return expected by an investor for taking on a higher risk compared to a risk-free asset.

Total Risk

The complete range of uncertainties including market, credit, liquidity, and operational risks that can affect the performance and valuation of investments.