Which One of the Following Is the Most Likely Reason

question 55

Multiple Choice

Which one of the following is the most likely reason why a stock price might not react at all on the day that new information related to the stock's issuer is released? Assume the market is semistrong form efficient.

• A) Company insiders were aware of the information prior to the announcement.
• B) Investors do not pay attention to daily news.
• C) Investors tend to overreact.
• D) The news was positive.
• E) The information was expected.

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Definitions:

Nonlinearity

The property of a system where the output is not directly proportional to its input, often resulting in complex and unpredictable behavior.

Multilinearity

The concept that there are multiple pathways or trajectories in developmental processes.

Ecological Systems Model

A theoretical model outlining the complex interrelations between individuals and their various environmental systems.

Target System

The specific subject or area intended for intervention, change, or influence in a given effort or initiative.