According to the Efficient Markets Hypothesis

question 106

Multiple Choice

According to the efficient markets hypothesis

• A) common stock prices should be constant.
• B) the price of a corporation's stock is likely to fluctuate substantially in response to news about changes in the company's short-term prospects.
• C) the price of a corporation's stock will fluctuate significantly only in response to news about changes in the company's long-term prospects.
• D) price fluctuations in common stock are a response to fads and are only infrequently the result of changes in the expected profitability of the companies involved.

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