A market decline of 23% on a day when there is no significant macroeconomic event ______ consistent with the EMH because ________.
A) would be,because it was a clear response to macroeconomic news.
B) would be,because it was not a clear response to macroeconomic news.
C) would not be,because it was a clear response to macroeconomic news.
D) would not be,because it was not a clear response to macroeconomic news.
E) We cannot tell based on the information given.

Question

Quizplus · Accepted Answer

The EMH suggests that stock prices reflect all available information, including macroeconomic events. If a market decline of 23% occurs on a day with no significant macroeconomic event, then it is not a clear response to such news and would therefore be inconsistent with the EMH.

A Market Decline of 23% on a Day When There