Suppose an efficient market has been operating with regard to stock in a particular company and that company announces that its profits were down 50% from the previous period but the stock price was unchanged after getting the news on a day when all of the other stocks are barely moving. This is
A) absolutely illogical.
B) at least potentially consistent with the efficient market hypothesis because investors may have been anticipating a 75% drop.
C) at least potentially consistent with the efficient market hypothesis because investors may have been anticipating a 25% drop.
D) at least potentially consistent with the efficient market hypothesis because investors may have been anticipating those 50% drop.
Correct Answer:
Verified
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