LJP Corporation just announced yesterday that it would undertake an international joint venture. You observe that LJP had an abnormal return of 3% yesterday. This suggests that
A) the market is not efficient.
B) LJP stock will probably rise in value again tomorrow.
C) investors view the international joint venture as bad news.
D) investors view the international joint venture as good news.
E) earnings are expected to decrease next quarter.

Question

Quizplus · Accepted Answer

The positive abnormal return suggests that investors view the international joint venture as good news.

LJP Corporation Just Announced Yesterday That It Would Undertake an International