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Suppose XYZ Corporation is traded on the New York Stock Exchange. XYZ ' s closing price on Monday is $ 2 0 per share. After
Suppose XYZ Corporation is traded on the New York Stock Exchange. XYZs closing price on Monday is $ per share. After the market closes on Monday, XYZ makes a surprise announcement that it has obtained a major new customer. XYZs stock will likely
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A
remain at $ per share because in efficient markets the price already reflects all information.
B
open at $ per share on Tuesday and then increase as more investors read the announcement in the Wall Street Journal.
C
open above $ because the positive news will result in a higher valuation even though the stock has not yet traded.
D
open below $ because the surprise announcement creates more uncertainty.
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