Suppose You Read in the Paper That Pfizer Has a New

question 29

Multiple Choice

Suppose you read in the paper that Pfizer has a new drug to cure diabetes. Using , you would expect the stock price to because .

• A)rational expectations; rise; earnings will grow
• B)adaptive expectations; rise; earnings will grow
• C)past information; rise; costs will grow
• D)adaptive expectations; fall; earnings will fall

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Definitions:

Delegations

The act of authorizing another person or entity to act on one's behalf in certain matters or decision-making processes.

English Parliament

The supreme legislative body in the United Kingdom, made up of the House of Commons, the House of Lords, and the Sovereign.

Act for the Prevention of Frauds and Perjuries

Historical legislation which aimed at reducing fraud and perjury in legal agreements, emphasizing the importance of written contracts.

Promissory Estoppel

The legal enforcement of an otherwise unenforceable contract due to a party’s detrimental reliance on the contract.