In 2000, ATI's chairman (and his wife) donated ATI shares they both owned to charity. The Ontario
Question:
In 2000, ATI's chairman (and his wife) donated ATI shares they both owned to charity. The Ontario Securities Commission (OSC) later sued the chairman and his wife of avoiding $7 million in losses and maximizing charitable tax benefits by donating the shares ahead of a May 2000 profit warning. The OSC is basing this lawsuit on the assumption that:
Question options:
a. the efficient market hypothesis does not hold at all, given the ATI shares had not yet fallen price in advance of the profit warning. | |
b. the strong form of the efficient market hypothesis does not hold as a non-insider such as the OSC would not have know about the upcoming ATI profit warning. | |
c. the strong form of the efficient market hypothesis does not hold as the chairman deliberately donated the shares before the profit warning, and obtained a charitable tax benefit based on the ATI stock price before the profit warning was released. | |
d. the strong form of the efficient market hypothesis does hold as the chairman deliberately donated the shares before the profit warning, and obtained a charitable tax benefit based on the ATI stock price before the profit warning was released. | |
e. the strong form of the efficient market hypothesis does hold as the chairman donated the shares before but unaware of the upcoming profit warning, and obtained a charitable tax benefit based on the ATI stock price before the profit warning was released. |