If the Market Is Fully Efficient,then an Announcement by a Firm

question 52

Multiple Choice

If the market is fully efficient,then an announcement by a firm of a new product with a high net present value will cause the market price of that firm's stock to

• A)remain constant.
• B)rise gradually over the next few days.
• C)decline gradually over the next few days.
• D)immediately increase to a new level equivalent to the increased value of the firm.
• E)immediately decline to a new level equivalent to the decreased value of the firm.

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Definitions:

Co-evolution

is the process by which two or more species reciprocally affect each other's evolution over time.

Natural Selection

A process in evolutionary biology where organisms better adapted to their environment tend to survive and produce more offspring, leading to evolutionary changes.

Pesticides

Chemical agents used in agriculture and public health to kill insects and other harmful organisms, aiming to reduce crop damage and disease transmission.

Chlorinated Hydrocarbons

Chemical compounds that contain carbon, hydrogen, and chlorine atoms, often used in industrial applications but can be harmful to the environment and health.