When New Information Becomes Available in the Market,evidence Generally Suggests

question 98

Multiple Choice

When new information becomes available in the market,evidence generally suggests that:

• A) insiders will be the only investors to gain.
• B) it takes at least ten trading days for stock prices to adjust.
• C) stock prices will adjust to the information rapidly.
• D) transaction costs will erase any benefit of trading on the information.

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Definitions:

Trial-And-Error

A problem-solving method involving repeated, varied attempts which are continued until success, or until the agent stops trying.

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus following a particular behavior increases the likelihood of that behavior being repeated.

Proximate Cause

The direct or immediate cause of an event or outcome, as opposed to more distant or ultimate causes.

Innate Behavior

Behaviors that are hardwired into an organism's biology and that an organism performs correctly the first time in response to a stimulus, without prior experience or learning.