Sometimes One Observes That the Price of a Company's Stock

question 1

Multiple Choice

Sometimes one observes that the price of a company's stock falls after the announcement of favorable earnings. This phenomenon is

• A)clearly inconsistent with the efficient markets hypothesis.
• B)consistent with the efficient markets hypothesis if the earnings were not as high as anticipated.
• C)consistent with the efficient markets hypothesis if the earnings were not as low as anticipated.
• D)consistent with the efficient markets hypothesis if the favorable earnings were expected.

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Definitions:

Difficult Goals

Targets or objectives that are challenging to achieve due to their complexity, high standards, or the significant efforts required.

Specific Goals

Clearly defined objectives that are quantifiable and time-bound, providing clear direction for effort and focus.

Goal Acceptance

The extent to which individuals endorse and commit to achieving a set goal.

Effort-To-Performance

The expectancy that one's investment of effort will lead to a certain level of performance.