If the Market Is Fully Efficient,then an Announcement by a Firm

question 52

Multiple Choice

If the market is fully efficient,then an announcement by a firm of a new product with a high net present value will cause the market price of that firm's stock to

• A)remain constant.
• B)rise gradually over the next few days.
• C)decline gradually over the next few days.
• D)immediately increase to a new level equivalent to the increased value of the firm.
• E)immediately decline to a new level equivalent to the decreased value of the firm.

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