If BP develops a fuel that eliminates noxious emissions but costs the same as gasoline, the efficient market hypothesis predicts that

Question

Quizplus · Accepted Answer

According to the efficient market hypothesis, all publicly available information is already reflected in the stock prices. Therefore, if BP were to develop a fuel that eliminates noxious emissions but costs the same as gasoline, that information would already be incorporated into the stock price. As a result, BP's stock price would rise immediately.

If BP Develops a Fuel That Eliminates Noxious Emissions but Costs