Reference no: EM132499802

In a graph depicting stock price changes over time in reaction to announcements providing new information, three possible patterns exist. In a "bubble" pattern there is a sharp increase at announcement followed by a gradual increase followed by a gradual decrease. In a "early response" pattern a gradual increase in price occurs before the announcement. In the "delayed response" pattern there is a slow or late increase in price after the announcement then a strong movement to the equilibrium price followed by no additional change in price from that announcement. Which of these patterns would be indicative of inefficient markets? A) Bubble B) Delayed C) Early D) All of the above E) None of the above