Reaction of Stock Price to New Information in Efficient and Inefficient Markets Stock Efficient market Delayed Price response to "bad news" response to "bad news" -30 -20-10 +10 +20 +30 Overreaction to "bad Days before (-)and news"with reversion after (+)announcement 77 Reaction of Stock Price to New Information in Reaction of Stock Price to New Information in Efficient and Inefficient Markets Efficient and Inefficient Markets Stock Price -30 -20 -10 0 +10 +20 +30 Days before (-) and after (+) announcement Efficient market response to “bad news” Overreaction to “bad news” with reversion Delayed response to “bad news