Fundamental Analysis Shows That Quadrangle Company Is Fairly Valued

question 127

Multiple Choice

Fundamental analysis shows that Quadrangle Company is fairly valued. Then Quadrangle Company unexpectedly improves its production techniques and unexpectedly hires a new CEO away from another very successful competitor. Suppose this has no effect on the price of the stock of Quadrangle Company.

• A)Fundamental analysis would now show the corporation is overvalued.The fact that the price was unchanged is consistent with the efficient markets hypothesis.
• B)Fundamental analysis would now show the corporation is overvalued.The fact that the price was unchanged is not consistent with the efficient markets hypothesis.
• C)Fundamental analysis would now show the corporation is undervalued.The fact that the price was unchanged is consistent with the efficient markets hypothesis.
• D)Fundamental analysis would now show the corporation is undervalued.The fact that the price was unchanged is not consistent with the efficient markets hypothesis.

---

Definitions:

Feature Detectors

Neurons in the brain that respond to specific features of a stimulus, such as angles, edges, or movements, playing a crucial role in visual perception.

Visual Cortex

The region of the brain responsible for processing visual information.

Ganglion Cells

Neurons located in the retina that receive visual information from the bipolar cells; their axons form the optic nerve.

Complex Patterns

Intricate arrangements or sequences that are composed of multiple elements and show a high level of detail or sophistication.