Which two of the following are the most likely reasons why a stock price might not react at all on the day that new information related to the stock issuer is released?
I.insiders knew the information prior to the announcement
II.investors need time to digest the information prior to reacting
III.the information has no bearing on the value of the firm
IV.the information was anticipated
A)I and II only
B)I and III only
C)II and III only
D)II and IV only
E)III and IV only

Question

Quizplus · Accepted Answer

If the information has no bearing on the value of the firm or was anticipated, the stock price might not react because the market has already priced in the information or it is irrelevant.

Which Two of the Following Are the Most Likely Reasons