The weather report says that a devastating and unexpected freeze is expected to hit Florida tonight during the peak of the citrus harvest. In an efficient market, one would expect the price of Florida Orange's stock to Group of answer choices increase immediately. drop immediately. gradually increase for the next several weeks. unable to determine. gradually decline for the next several weeks.

A. drop immediately.

Explanation:

In an efficient market, assets within it are expected to accurately represent all of the knowledge that affects that asset. The market is very sensitive to and changes accordingly to new knowledge.

When the weather forecast states that it is expected that a catastrophic and unpredictable freeze will strike Florida tonight during the height of the citrus harvest, the price of Orange 's stock will instantly drop.

A later good news could trigger an increase in stock prices.

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