Shareholders Discount Many Corporate Announcements Because of Their Prior Expectations

question 39

Multiple Choice

Shareholders discount many corporate announcements because of their prior expectations. If an announcement causes the price to change it will mostly be driven by:

• A) the expected part of the announcement.
• B) market inefficiency.
• C) the innovation or unexpected part of the announcement.
• D) the systematic risk.

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Definitions:

Situation-Trait Debate

A discussion in psychology that investigates whether human behavior is more influenced by situational factors or by enduring personality traits.

Five Factors

Often related to the "Big Five" personality traits model, which includes openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Social Support

The perception or reality of assistance and solidarity available from others, especially during times of stress or need.

Stable

Consistent and unchanging over time.