4. Find an announcement of new information made within a month from today (i.e.,

Question

4. Find an announcement of new information made within a month from today (i.e., earnings announcement, merger, etc.) for any publicly traded stock that moves the stock price at least 1%. Print out or draw a chart that shows at least 2 days before the event and at least one day after.    [Note: make sure you find the first announcement of the information.]

(a) Using this chart, analyze if the evidence is consistent with the semi-strong form market efficiency.

(b) Is the stock market reaction consistent with the strong form of market efficiency?

Please provide link to the annoucnement and chart used if possible.

Explanation / Answer

Please find the link as requested in question :-

http://www.business-standard.com/article/markets/acquisition-by-blackstone-to-accelerate-mphasis-growth-116040400926_1.html

Before opening stock market corporation issued a press release that they would be acquisition by Blackstone to accelerate Mphasis' growth. And also said that its earnings are above last year’s earnings.

(a) When trading opened after the announcement, the stock price quickly decreased by Mphasis Ltd – returns -8.57% with compare to last month’s 6.86%

(b) Yes stock market reaction consistent with the strong form of market efficiency The stock price of Mphasis increased slowly over the 30 days before the announcement that earnings were higher than last year and the stock price decreased from Rs 471 immediately following the announcement but then increased throughout the day so that the closing price was only Rs 459 below the previous day

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.