Under the Efficient Markets Hypothesis,for News About a Company's Prospects

question 8

Multiple Choice

Under the efficient markets hypothesis,for news about a company's prospects to have a large impact on the price of the company's stock,the news must

• A) have an impact on the company's profitability in the short term.
• B) have an impact on the company's profitability in the long term.
• C) significantly increase the likelihood that the company will go bankrupt.
• D) significantly reduce the liquidity of the company's stock.

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Definitions:

Citric Acid Cycle

Series of chemical reactions in aerobic cellular respiration in which acetyl coenzyme A is completely degraded to carbon dioxide and water with the release of metabolic energy that is used to produce ATP; also known as the Krebs cycle and the tricarboxylic acid (TCA) cycle.

Glycolysis

The first stage of cellular respiration as well as fermentation; literally the “splitting of sugar.” The metabolic conversion of glucose into pyruvate, accompanied by the production of ATP

Oxidative Decarboxylation

A metabolic process in which a carboxyl group is removed from a molecule as CO2, typically coupled with the reduction of NAD+ to NADH.

Pyruvates

The ionized form of pyruvic acid, a key intermediate in several metabolic pathways, including glycolysis.