According to the efficient markets hypothesis, which of the following would decrease the price of stock in Veblen's Leisure Company?
A)Veblen announces, just as everyone had expected, that it has fired its CEO who has been accused of ethics violations.
B)Veblen announces, as the market had expected, that its profits were low.
C)Fundamental analysis published by KM Financial shows that Veblen's stock is undervalued.
D)A highly anticipated book is published by a Veblen insider which details Veblen's innovative technology in plain English, information that was previously unavailable to the public and which will now be used by Veblen's competitors.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis suggests that stock prices reflect all available information. If new information, such as the details of Veblen's innovative technology becoming available to competitors, is released, it could negatively impact the company's competitive advantage and thus decrease the stock price.

According to the Efficient Markets Hypothesis, Which of the Following