Gotterdammerung Corporation is a blue-chip company in the specialty chemicals industry. Rheingold Group Inc. purchases various chemical compounds from Gotterdammerung and uses them in its pharmaceuticals at a 40% margin and has been doing so for years. However, over the past five years, Rheingold's performance has not been good and in 2018 its auditors raised doubts about the firms ability to continue as a going concern due to Rheingolds liquidity position.

By the end of the first quarter of 2019, rumors of a takeover of Rheingold by Gotterdammerung were reported by the financial media. Many of the reports claimed unidentified top-level directors of both companies supported the acquisition. On May 15, in a press conference, officials of Gotterdammerung declared the company would not acquire Rheingold. However, Gotterdammerung agreed to provide a substantial cash loan to Rheingold.

New legislation regulating the chemical and pharmaceutical industries was enacted by the government in January 2019. The act requires manufacturers to make large investments to prevent contamination of the environment by chemicals and pharmaceuticals. The act became effective in the first week of May, and the share prices of Gotterdammerung declined 25% over the following week.

Which of the following comments about market efficiency of Gotterdammerung's shares is most likely true?

a. The market is highly efficient, as the share prices of Gotterdammerung decreased as soon as the new legislation came into force. b. The market is inefficient, as the investors of Gotterdammerung pursued short-term goals instead of preferring long-term investment benefits. c. The market is inefficient, as the market value of Gotterdammerung's shares does not appear to reflect its intrinsic value between January and May. d. Fill e. None of the above answers are correct.