Question

Suppose that interest rates unexpectedly rise and that Carter Corporation announces that revenues from last quarter were down but not as much as the public had anticipated they would be down. According to the efficient markets hypothesis, which of the these things make the price of Carter Corporation Stock fall?a. both the interest rate rising and the revenue announcement b. neither the interest rate rising nor the revenue announcement c. only the interest rate rising d. only the revenue announcement

Answer 1

c. only the interest rate rising

Step-by-step explanation:

According to the efficient markets hypothesis, an increase in the interest rate makes the price of stocks to fall in a firm.

Hence, Carter Corporation Stock fell as a result of the interest rate rising.