Each of the following would tend to weaken the Efficient Market Hypothesis EXCEPT:
A)There is publicly available information that Boeing Aircraft has procured a contract to build 25 planes for the U.S.Government and the price of Boeing quickly goes up.
B)ACG,Inc.performed well for the past six months,but they just lost a major distribution contract,but the price of ACG stock continues to go up.
C)Louisville Slugger,Inc. ,gets a contract to supply bats for Little League play,a contract it never had before,and stock price remains stable.
D)Disney corporation,a growth company,opens a new theme park,which investors expect will do tremendously well,and the stock price stays stable,while Urban Electric Company,which has a set infrastructure,and generates 95% of its earnings from assets it owns,outperforms Disney.

Question

Quizplus · Accepted Answer

The Efficient Market Hypothesis (EMH) suggests that stock prices reflect all available information. Choice A describes a scenario where the stock price quickly adjusts to new public information, which is consistent with EMH. The other choices describe situations where stock prices do not reflect new information, which would weaken EMH.

Each of the Following Would Tend to Weaken the Efficient