If the public expects a corporation to gain $5 per share in value this quarter and it actually gains $4, which is still the largest gain in the history of this company, the efficient market hypothesis says its stock price would fall.

A. True

B. False

Question

Amiyah Hood

Business

6 August, 10:41

If the public expects a corporation to gain $5 per share in value this quarter and it actually gains $4, which is still the largest gain in the history of this company, the efficient market hypothesis says its stock price would fall.

A. True

B. False

+2

Answers (1)

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Ruth · Answer 1

A. True

Explanation:

Considering the corporation is making a gain through the price of the stock shows larger gain than expected. In a situation where the gain is less than what is expected, the coefficient market hypothesis says its stock price would fall.

The hypothesis informs that the financial market has sufficient information in which the total information in the market is a reflection of the share price.

Therefore, market instruments such as stocks are sold and bought at the best possible value hence cannot be under purchased or over sold.

If the public expects a corporation to gain $5 per share in value this quarter and it actually gains $4, which is still the largest gain in the history of this company, the efficient market hypothesis says its stock price would fall.A. TrueB. False

If the public expects a corporation to gain $5 per share in value this quarter and it actually gains $4, which is still the largest gain in the history of this company, the efficient market hypothesis says its stock price would fall.

A. True

B. False