New Labs Just Announced That It Has Received a Patent

question 49

Multiple Choice

New Labs just announced that it has received a patent for a product that will eliminate all flu viruses.This news is totally unexpected and viewed as a major medical advancement.Which one of the following reactions to this announcement indicates the market for New Labs stock is efficient?

• A)The price of New Labs stock remains unchanged.
• B)The price of New Labs stock increases rapidly and then settles back to its pre-announcement level.
• C)The price of New Labs stock increases rapidly to a higher price and then remains at that price.
• D)All stocks quickly increase in value and then all but New Labs stock fall back to their original values.
• E)The value of all stocks suddenly increase and then level off at their higher values.

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Definitions:

Enlarged Brain Ventricles

A condition where the fluid-filled cavities within the brain are larger than normal, often associated with various neurologic and psychiatric conditions.

Gray Matter

The darker tissue of the brain and spinal cord, consisting mainly of nerve cell bodies and branching dendrites, involved in processing and storing information.

Psychoneuroimmunological

Relating to the study of the interactions between psychological processes, the nervous system, and the immune system.

Interpersonal Problems

Issues or difficulties in interactions with other people, which may include communication problems, misunderstanding, and conflicts.