Xavier Aptitude Test 2017 Paper

Question : 8 of 97

Marks: +1, -0

Read the following passage and answer the question that follows:
On Friday morning, Dieting supplement sales company Herbalife agreed to pay the US Federal Trade Commission a

\$

200m fine. The FTC said Herbalife cheated hopeful sales people out of hundreds of millions of dollars with a high pressure multi-level marketing scheme.
Herbalife’s stock received an immediate 15% increase following the above news. The company also announced that it would hire a second former FTC commissioner in a press release describing the terms of the settlement.
Which of the following options would imply that the 15% increase in stock price is fair?

Cheating results in increase in the company’s stock price.
When fraudulent companies are exposed, their stock price increases.
When fraudulent companies are caught, their stock price initially goes down.
Acknowledgement of deceit increases the stock price of companies.
Compliance with court order increases the company’s stock price.

Validate

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