Which of the following is true about the impact on market price of a security when a company makes an announcement and the market has discounted the news?
A)The price will change a great deal; even though the impact is primarily in the future, the
Future value is discounted to the present.
B)The price will change little, if at all, since the impact is primarily in the future.
C)The price will change little, if at all, since the market considers this information
Unimportant.
D)The price will change little, if at all, since the market considers this information untrue.
E)The price will change little, if at all, since the market has already included this information
In the security's price.

Question

Quizplus · Accepted Answer

If the market has already discounted the news, it means that the information has already been reflected in the security's price. Therefore, the impact of the announcement on the market price will be minimal or non-existent.

Which of the Following Is True About the Impact on Market