IBM announces that earnings per share for the current quarter are $1.25; this figure is barely half of what investors and analysts expected. In an efficient market, the price of IBM stock will:
A) change immediately to reflect changes in investor expectations
B) Gradually fall over several days as investors assimilate the new information.
C) First fall, reflecting investors' surprise; then rise back somewhat as investors assimilate the new information.
D) Probably not change at all.
E) Fall only if there is additional unfavourable news about IBM announced at the same time.
Correct Answer:
Verified
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