Asked by Nicole Nagatoshi on May 03, 2024
Verified
Suppose that interest rates unexpectedly rise and that FineLine Corporation announces that revenues from last quarter were down but not as much as the public had anticipated they would be down. According to the efficient markets hypothesis, which of the following makes the price of FineLine Corporation Stock fall?
A) Both the interest rate rising and the revenue announcement
B) Neither the interest rate rising nor the revenue announcement
C) Only the interest rate rising
D) Only the revenue announcement
Efficient Markets Hypothesis
A theory that suggests financial markets are informationally efficient, meaning prices of traded assets reflect all available information at any given time.
Interest Rates
The cost of borrowing money or the return on investment for savings, often expressed as a percentage.
Revenue Announcement
Revenue announcement refers to a company publicly disclosing its revenue figures for a specific period, which can impact its stock price and investor perception.
- Discern and fathom the repercussions of news dissemination and corporate operations on stock market prices pursuant to the principles of the Efficient Market Hypothesis.
Verified Answer
Learning Objectives
- Discern and fathom the repercussions of news dissemination and corporate operations on stock market prices pursuant to the principles of the Efficient Market Hypothesis.
Related questions
An Automobile Manufacturer Unexpectedly Announces That It Has Hired a ...
According to the Efficient Markets Hypothesis, Worse-Than-Expected News About a ...
The True Risk of Any Investment Is the __________________________ ...
Brady Lady Cosmetics Just Announced That Earnings for the First ...
A Corporation Has 50,000 Shares of $28 Par Stock Outstanding ...