DG Aerotech, an aerospace research firm, announced this morning that it hired the world's most...
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DG Aerotech, an aerospace research firm, announced this morning that it hired the world's most knowledgeable and prolific space researchers. Before today, its stock had been selling for $100. Assume that no other information is received over the next week and the stock market as a whole does not move. a) What do you expect will happen to DG Aerotech's stock? b) Discuss the following scenarios. Which scenarios indicate market efficiency, which do not? Why? The stock price jumps to $118 on the day of the announcement, in subsequent days it rises to $123 and then falls to $118 The stock price rises to $118 and remains at that level The stock price gradually rises to $118
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