Which one of the following events is considered part of the expected return on Fido stock?
A) The president of Fido suddenly announced that the ﬁrm is going to cut production effective immediately.
B) The government just announced a tax cut which will directly impact the sales of Fido.
C) The management of Fido announced their ten-year plan for expansion ﬁve years ago.
D) The price of Fido stock suddenly dropped due to rumours concerning company fraud.
E) Fido just won a major government contract which they had not anticipated winning.

Question

Quizplus · Accepted Answer

The ten-year plan for expansion announced five years ago is likely already factored into the stock's price and expected return, as it is information that has been available to the market for some time.

Which One of the Following Events Is Considered Part of the Expected