KWM Corporation just announced yesterday that it would undertake an international joint venture. You observe that KWM had an abnormal return of 3% yesterday. This suggests that
A) the market is not efficient.
B) KWM stock will probably rise in value again tomorrow.
C) investors view the international joint venture as bad news.
D) investors view the international joint venture as good news.
E) earnings are expected to decrease next quarter.

Question

Quizplus · Accepted Answer

The abnormal return of 3% suggests that investors reacted positively to the announcement of the international joint venture, indicating they view it as good news for KWM Corporation.

KWM Corporation Just Announced Yesterday That It Would Undertake an International