When new information becomes available in the market,evidence suggests that:
A) insiders will be the only investors to gain.
B) it takes at least 10 trading days for stock prices to adjust.
C) stock prices will adjust to the information rapidly.
D) transaction costs will erase any benefit of trading on the information.

Question

Quizplus · Accepted Answer

Recent research has shown that stock prices will adjust rapidly to new information becoming available in the market. This is due to increased use of technology and faster dissemination of news. Additionally, high-frequency traders and algorithms are able to react very quickly to new information, further accelerating the adjustment of stock prices.

When New Information Becomes Available in the Market,evidence Suggests That