If an Announcement by a Firm Causes the Price of That

question 42

Multiple Choice

If an announcement by a firm causes the price of that firm's stock to suddenly change,that price change will most likely be driven by:

• A)the expected part of the announcement.
• B)market inefficiency.
• C)the unexpected part of the announcement.
• D)systematic risk.
• E)expectations of a revised announcement in the near term.

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Definitions:

Reinforcement

In psychology, a process by which a stimulus increases the likelihood of the behavior that it follows.

Continuous Reinforcement

A method of learning that involves providing a reward immediately after the desired behavior is exhibited, each and every time.

Desired Behavior

A specific action or response that is sought after or encouraged, often through incentives or rewards.

Reinforcer

A stimulus or event that increases the likelihood of the repetition of the behavior that preceded it.