According to the efficient markets hypothesis, what changes the price of a share of a corporation's stock? Make up an example
Only news that changes the public's perception of the value of the corporation. If a company's profits are higher than anticipated, its price goes up.
You might also like to view...
Refer to Figure 13-4. In the figure above, LRAS1 and SRAS1 denote LRAS and SRAS in year 1, while LRAS2 and SRAS2 denote LRAS and SRAS in year 2. Given the economy is at point A in year 1, what is the growth rate in potential GDP in year 2?
A) 8% B) 9.1% C) 10% D) 12%
Giorgio wants to build a new distribution warehouse for his sporting goods business and is going to issue new shares of stock to do so. This is an example of using ________ for his building project
A) indirect finance B) direct finance C) dividends D) retained earnings
With free entry:
A. the long run market supply curve is horizontal at the market price. B. the long run market supply curve is vertical at the market price. C. the short and long run market supply curves are the same. D. there is a known and limited number of potential suppliers that can produce a good in the long run.
According to the rational expectations school,
a. the Phillips curve is upward sloping in the short run and downward sloping in the long run b. both for the short and long runs, the Phillips curve is horizontal c. both for the short and long runs, the Phillips curve is vertical d. there is no Phillips curve e. Keynesians assume irrational expectations behavior on the part of firms and individuals that allows them, erroneously, to conclude that there are no trade-offsbetween inflation and unemployment