Which of the following is true regarding the value the investment community places on celebrity endorsers?
A) Stock prices can increase when a company announces celebrity-endorsement contracts.
B) Stock prices can decrease when negative publicity reaches the media about a celebrity who endorses one of the company's brands
C) The investment community does not consider the use of a celebrity endorser when determining stock price.
D) a and b only
E) a, b, and c

Question

Which of the following is true regarding the value the investment community places on celebrity endorsers? 
A) Stock prices can increase when a company announces celebrity-endorsement contracts. 
B) Stock prices can decrease when negative publicity reaches the media about a celebrity who endorses one of the company's brands 
C) The investment community does not consider the use of a celebrity endorser when determining stock price. 
D) a and b only 
E) a, b, and c

Quizplus · Accepted Answer

Studies have shown that stock prices can increase when a company announces celebrity-endorsement contracts (option A). However, negative publicity surrounding a celebrity endorser can also lead to a decrease in stock prices (option B). Therefore, both options A and B are correct, making option D the best choice. Option C is incorrect, as the investment community does consider the use of celebrity endorsers when determining stock price.

Which of the Following Is True Regarding the Value the Investment