Explanation for the observed price movement

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Suppose that a stock has fallen in price on a given day. Which of the following would be an example of a discount rate explanation for the observed price movement?

  1. Investors perceive the stock to have more exposure to macroeconomic shocks
  2. The firm loses a major patent lawsuit, which reduces their likely profits for the next decade
  3. A change in sentiment causes investors to irrationally push down the price of the stock
  4. The systematic risk of the stock has decreased

Reference no: EM132674678

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