Two Weeks Ago Ace Electronics Announced That It Had Developed

question 63

Multiple Choice

Two weeks ago Ace Electronics announced that it had developed a new chip design which was being considered by major companies for use in future smart phone development.At the close of trading the day before the announcement,Ace common stock closed at $20.On the day following the announcement,Ace closed at $21.Two days after the announcement the stock closed at $22.50.Four days after the announcement the stock traded at $23.Last week,Ace stock traded at $26,a level it has maintained since then.This is an example of a(n) :

• A)over-reaction and correction.
• B)underpricing.
• C)delayed reaction.
• D)pre-activity action.
• E)efficient market reaction.

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Definitions:

Botswana

A landlocked country located in Southern Africa, known for its stable democracy, natural beauty, and rich diamond mines.

Opportunity Costs

The cost of foregone alternatives; the benefits one misses out on by choosing one option over another.

Nations

Politically organized territories with defined borders, a common government, and a shared cultural or historical identity.

Technologies

Encompasses the collection of techniques, skills, methods, and processes used in the production of goods or services or in the accomplishment of objectives, such as scientific investigation.