Which of the following is NOT an implication of the efficient market hypothesis for corporate financial officers?
A)They should ignore dramatic changes in their company's stock price.
B)There is no point in timing the issue of new securities.
C)It does not make sense to "play" interest rates by rolling over short-term debt until long-term rates fall.
D)There is no point in timing stock repurchases in an efficient market.

Question

Quizplus · Accepted Answer

The efficient market hypothesis suggests that stock prices fully reflect all available information at any point in time. Therefore, corporate financial officers cannot take advantage of any information asymmetry to generate abnormal profits. However, they should not ignore dramatic changes in their company's stock price but should investigate them to determine whether there is new information available that would affect the company's value.

Which of the Following Is NOT an Implication of the Efficient