In an efficient market if a company announced sales of a new product are lower than expected, what would you expect to happen to the stock price?
A) It would not change.
B) It would increase.
C) It would decrease.
D) It would move it the same direction as the market in general.

Question

Quizplus · Accepted Answer

In an efficient market, the stock price would likely decrease due to the announcement of lower than expected sales. This is because the market would already have factored in the expected sales into the price of the stock, and the actual sales falling short would be perceived as negative news by investors, resulting in a decrease in the stock price.

In an Efficient Market If a Company Announced Sales of a New