LJP Corporation just announced yesterday that it would undertake an international joint venture.You observe that LJP had an abnormal return of 3% yesterday.This suggests that
A)the market is not efficient.
B)LJP stock will probably rise in value again tomorrow.
C)investors view the international joint venture as bad news.
D)investors view the international joint venture as good news.

Question

Quizplus · Accepted Answer

An abnormal return of 3% suggests that investors view the international joint venture as good news for LJP Corporation. It is unlikely that the market is inefficient, and we cannot predict whether the stock will rise again tomorrow based on this information alone. Additionally, there is no evidence to suggest that investors view the joint venture as bad news.

LJP Corporation Just Announced Yesterday That It Would Undertake an International