The CEO of JLI Corp. decided to expand into a new market in 2010. At t

The CEO of JLI Corp. decided to expand into a new market in 2010. At the end of 2010, JLI’s stock
price had decreased 5% since the beginning of the year. Which of the following statements is MOST
correct?

A) The CEO made a poor decision to expand because the stock price decreased during the year.
B) CEO decisions are irrelevant because the efficient market determines the value of a company’s
stock.
C) The CEO’s decision may have been optimal, keeping the stock price from falling more than
5% for the year.
D) The CEO made a poor decision to expand because the company’s profits for the year
obviously decreased, causing the drop in stock price.

ANSWER

C