In an Efficient Market Which of the Following Would Not

question 110

Multiple Choice

In an efficient market which of the following would not be expected to cause a quick price change in the stock of a company?

• A) an unexpected announcement by a major competitor
• B) higher than predicted earnings announcement
• C) unexpected death of CEO
• D) all the above would be expected to cause a quick price change

---

Definitions:

Substitution Effect

The change in consumption patterns due to a change in price, leading consumers to substitute one product for another.

Real Balance Effect

An economic theory suggesting that inflation or deflation changes individuals' purchasing power, affecting their real income and consumption patterns.

Marginal Utility

The additional satisfaction or utility gained by consuming one more unit of a good or service.

Total Utility

The total satisfaction received from consuming a given total quantity of a good or service.