How Should Cumulative Abnormal Returns React in an Efficient Market

question 41

Multiple Choice

How should cumulative abnormal returns react in an efficient market?

• A) relatively constant, sharp break, relatively constant
• B) relatively constant with no breaks
• C) steadily increasing
• D) steadily decreasing
• E) remain constant at zero

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold, determined by the supply and demand dynamics in the open market.

Conservation

The careful management and preservation of natural resources to prevent waste, degradation, or loss.

Cost-Benefit Analysis

A systematic approach to estimating the strengths and weaknesses of alternatives used to determine the best option(s) through the benefits and costs.

Resource Extraction

The process of removing natural resources from the environment for human use.