If a cable news channel breaks news one morning that a major light bulb company announced a new long-lasting light bulb and you call your broker the next day to buy stock in the company, will you make money based on this information?
A) Yes, because it will take a while for the company to recover the R&D costs of the light bulbs.
B) Yes, because it will take time before the light bulbs show up in stores (and thus time before the new revenue's reflected in the company's bottom line) .
C) No, because the broker fees will eat away all your profits.
D) No, because the new information will already be reflected in the stock price when you purchase the stock.
Correct Answer:
Verified
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