There is a sudden and huge increase in oil price. In an efficient market one would expect the stock price of Northeast Airlines Inc. to

a. drop immediately.

b. remain unchanged.

c. increase immediately.

d. gradually decline for the next several weeks.

e. gradually increase for the next several weeks.

12. The market decline of 23% on Black Monday, 1987 ___ consistent with the EMH because ________. (There were no major macroeconomic news announced on that day.)

a. is, because it was a clear response to macroeconomic news.

b. is, because it was not a clear response to macroeconomic news.

c. is not, because it was a clear response to macroeconomic news.

d. is not, because it was not a clear response to macroeconomic news.

e. cannot tell based on the information given