Which of the Following Is True About the Impact on Market

question 28

Multiple Choice

Which of the following is true about the impact on market price of a security when a company makes an announcement and the market has discounted the news?

• A)The price will change a great deal; even though the impact is primarily in the future, the future value is discounted to the present.
• B)The price will change little, if at all, since the impact is primarily in the future.
• C)The price will change little, if at all, since the market considers this information unimportant.
• D)The price will change little, if at all, since the market considers this information untrue.
• E)The price will change little, if at all, since the market has already included this information in the security's price.

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Definitions:

Classical Conditioning

A learning process that involves pairing a previously neutral stimulus with an unconditioned stimulus to elicit a conditioned response.

High Income

Earning significantly above the median or average level in a given geographical area or within a specific field or industry.

Persuasion

The process of influencing someone's beliefs, attitudes, intentions, motivations, or behaviors.

Advantages and Disadvantages

The beneficial and negative aspects or outcomes associated with a particular action, decision, or situation.