Suppose That Google Announces That Its Profits for the Third

question 95

Multiple Choice

Suppose that Google announces that its profits for the third quarter of 2013 were $1.6 billion. As a result of this announcement the price of Google's stock declines. The best explanation of this is

• A)market participants expected Google's profits to be greater than $1.6 billion for the third quarter.
• B)market participants expected Google's profits to be less than $1.6 billion for the third quarter.
• C)the stock market is not an efficient market.
• D)market participants have adaptive expectations.

---

Definitions:

Well-Worded Question

A question that is clearly and concisely formulated to guide research or inquiry in a meaningful direction.

Randomly Assigned

A process in experimental design where participants are allocated to different groups or conditions by chance, minimizing bias and ensuring each participant has an equal chance of being assigned to any group.

Treatments

In experimental research, different conditions applied to groups to observe and measure the effects.

Observational Study

A research method in which the researcher observes subjects in their natural environment without manipulation or intervention.