A company stock had a closing price of $200 yesterday, but new information after the market closed has pushed the price forecast to $250 for the next year. Explain that if the company's annual equilibrium return is 15%, the efficient market hypothesis indicates what will happen to the company's price when the market opens today.

Answer rating: 100% (QA)

According to the Efficient Market Hypothesis EMH which suggests that financial markets are efficient ... View the full answer