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When the company founder died of a heart attack, the stock price immediately jumped from $15 per share to $18, a 20% increase. This market
When the company founder died of a heart attack, the stock price immediately jumped from $15 per share to $18, a 20% increase. This market reaction is evidence of market inefficiency because his death would have been anticipated in an efficient market and price would have adjusted beforehand. Assume that there is no other information and the stock market as a whole does not move. Is the statement about market efficiency true or false? Explain briefly.
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