In the event of unexpected news announcement, such as a significant reduction in profit expectations, which of the following is NOT a likely stock price reaction?: Select one: a. The price instantaneously adjusts to the new information. b. No reaction, since the market has already learned to "expect the unexpected" c. The price over-adjusts to the new information, but eventually falls to the appropriate price. Od. The price partially adjusts to the new information.
In the event of unexpected news announcement, such as a significant reduction in profit expectations, which of the following is NOT a likely stock price reaction?: Select one: a. The price instantaneously adjusts to the new information. b. No reaction, since the market has already learned to "expect the unexpected" c. The price over-adjusts to the new information, but eventually falls to the appropriate price. Od. The price partially adjusts to the new information.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
![In the event of unexpected news
announcement, such as a
significant reduction in profit
expectations, which of the
following is NOT a likely stock
price reaction?:
Select one:
a. The price instantaneously
adjusts to the new
information.
b. No reaction, since the
market has already
learned to "expect the
unexpected"
The price over-adjusts to
the new information, but
eventually falls to the
appropriate price.
d. The price partially adjusts
to the new information.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8a1ebc89-7a55-4de3-87ee-e06ecdf9c8e0%2Fe2e7454f-7931-4b35-ba78-a19a203f1115%2Fhr3w9rs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In the event of unexpected news
announcement, such as a
significant reduction in profit
expectations, which of the
following is NOT a likely stock
price reaction?:
Select one:
a. The price instantaneously
adjusts to the new
information.
b. No reaction, since the
market has already
learned to "expect the
unexpected"
The price over-adjusts to
the new information, but
eventually falls to the
appropriate price.
d. The price partially adjusts
to the new information.
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