Question
During a trading day, American Air Inc. announces that it has lost a contract for a large transport plane project, which, prior to the news,
During a trading day, American Air Inc. announces that it has lost a contract for a large transport plane project, which, prior to the news, it was widely believed to have secured.If the market is semistrong form efficient, how should the stock price react to this information if no additional information is released?
D) At the time of the announcement, there is a 50 percent chance that the price of the stock could increase or decrease since stock price movement is random.
A) At the time of the announcement, the price of the stock should immediately increase.
C) At the time of the announcement, the price of the stock should immediately decrease.
B) At the time of the announcement, the price of the stock should not change.
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