Which of the following real-world scenarios best exemplifies information asymmetry in a public stock company?
A) Based on a tip-off by a Goldman Sachs employee, the Galleon Group sold its holdings in Goldman Sachs' stocks prior to the announcement of missed earnings estimates.
B) GE knew that it could create a profitable venture out of producing green products, so it rolled out the Ecomagination strategy.
C) Mark Hurd, CEO of HP, was unaware of the sexual harassment allegations, and the board's demand for him to resign caught him by surprise.
D) Goldman Sachs followed through with the Abacus deal despite knowing its shortcomings.
Correct Answer:
Verified
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