WHICH OF THE FOLLOWING STATEMENTS IS MOST LIKELY TRUE

2. - CFA 2018 LEVEL 2 PORTFORLIO QUESTION BANK R50 ECONOMICS AND INVESTMENT MARKETS Q BANK
CFA 2018 LEVEL 2 PORTFORLIO QUESTION BANK R50 ECONOMICS AND INVESTMENT MARKETS Q BANK

2. Which of the following statements is most likely true?

A. Equity markets always reflect the expectations of market participants hence actual results

are unlikely to affect market values.

B. The effect of new information on asset values depends on whether that information was

built into market expectations or not.

C. All else equal, positive earnings surprises are likely to bring down market value because

investors were not expecting the result.