According to the Efficient Markets Hypothesis, Stock Price Changes Reflect

Multiple Choice

According to the efficient markets hypothesis, stock price changes reflect ______, but according to Keynes, stock price changes often reflect ______.

A) the inventory accelerator; changes in Tobin's q
B) changes in the real cost of capital; financing constraints
C) changes in the underlying economic fundamentals; irrational waves of optimism or pessimism
D) reductions in investment tax credits; the use of historical cost rather than replacement cost in computing depreciation costs