According to the Efficient Markets Hypothesis, Which of the Following

question 456

Multiple Choice

According to the efficient markets hypothesis, which of the following would decrease the price of stock in Veblen's Leisure Company?

• A)Veblen announces, just as everyone had expected, that it has fired its CEO who has been accused of ethics violations.
• B)Veblen announces, as the market had expected, that its profits were low.
• C)Fundamental analysis published by KM Financial shows that Veblen's stock is undervalued.
• D)A highly anticipated book is published by a Veblen insider which details Veblen's innovative technology in plain English, information that was previously unavailable to the public and which will now be used by Veblen's competitors.

---

Definitions:

Principal

The original sum of money invested or loaned, before interest.

Agents

Individuals or entities authorized to act on behalf of another, typically in business transactions.

Agency Relationship

A legal relationship in which one party, the agent, is authorized to act on behalf of another, the principal, in business transactions with third parties.

Independent Contractor

An individual or entity contracted to perform work for another entity as a non-employee, retaining control over how the work is completed.