1. A company spokesman publicly announces that the company will be expanding their production capacity in the U.S. You b

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1 A Company Spokesman Publicly Announces That The Company Will Be Expanding Their Production Capacity In The U S You B 1 (329.38 KiB) Viewed 34 times

1. A company spokesman publicly announces that the company will be expanding their production capacity in the U.S. You believe that this will be good for the company's future cash flows and that you should buy the stock. Which of the following a true statement, if the stock market is semi-strong form efficient? a. The stock price will likely not have reacted fully to the announcement, and you will expect to earn abnormal returns by buying the stock. b. The stock price will have over-reacted to the announcement, and you will expect to earn abnormal returns by selling the stock short. c. The stock price will have correctly reacted to the company announcement and you will not be able to expect to earn abnormal returns on this stock. d. None of the above.