Discuss on stock market movement and market inefficiency, Ask an Expert

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Discuss on stock market movement, market inefficiency.

When the 56-year-old founder of G & W Inc., died of a heart attack, the stock price immediately jumped from $18.00 a share to $20.25, a 12.5% increase. This is evidence of market inefficiency, because an efficient stock market would have anticipated his death and adjusted the price beforehand. Assume that no other information is received and that the stock market as a whole does not move. Is this statement true or false? Explain.

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