Which of the Following Does NOT Correctly Complete This Sentence

question 74

Multiple Choice

Which of the following does NOT correctly complete this sentence: In general, the link between an information announcement and the stock price is that ____________________.

• A) The expected stock return will change if the announcement contains a surprise component.
• B) The stock price will not change if the announcement provided only anticipated information.
• C) Only announcements that have already been discounted will affect the stock price.
• D) In order for the price of the stock to change, the announcement must be relevant to that particular stock and must be unanticipated.
• E) If markets are efficient in the semi-strong form, then the market will react rapidly to the new information.

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Definitions:

Corrective Tax

A tax designed to internalize externalities, effectively correcting market outcomes that might otherwise result in social inefficiency.

Command-And-Control Policies

Regulatory strategies where the government sets specific limits and controls on emissions or discharges, often requiring technology or methods to be used.

Corrective Taxes

Taxes imposed to correct the market outcomes by accounting for externalities and bringing the social costs and benefits into balance.

Economic Efficiency

An economic state where every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.