When the market adjusts to new information,investors will buy shares where:

Question

Quizplus · Accepted Answer

When the market adjusts to new information, investors will buy shares where the expected return is more than the required return. This is because investors are looking for a higher return on their investment, and if the expected return is lower than the required return, it would not be a profitable investment. Option A is not necessarily true as there may still be uncertainty about future returns even when the market adjusts to new information. Option C is not profitable for investors as the expected return is lower than the required return. Therefore, the best choice is B.

When the Market Adjusts to New Information,investors Will Buy Shares