The efficient market theory would be violated if investors earned extraordinary returns months after a company announced unexpected profits. Thus, the correct option is (d.) Investors earn abnormal returns months after a firm announces surprise earnings.
<h3>What exactly is the hypothesis of an efficient market?</h3>
The efficient-market hypothesis is a financial economics concept that asserts asset prices represent all available information. Because market prices should only react to fresh information, it is impossible to continually "beat the market" on a risk-adjusted basis.
Because the EMH is expressed in terms of risk adjustment, it can only offer testable predictions when combined with a specific risk model. As a result, financial economics research has focused on market anomalies, or departures from specified risk models, since at least the 1990s.
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Answer:
d) tax the manufacturing of cigarettes
Explanation:
Taxation imposed by government on the manufacturing of a commodity increases the cost of production and shifts the supply curve of such commodity inward, that is to the left. When the government imposes tax on the manufacturing of cigarettes, the cost of producing cigarettes will increase and that will reduce the supply of cigarettes all things being equal.
Is that really a question... I hope not.
