Read the following passage and answer the question that foll

M: +1.00/-0.00

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 salespeople 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 percent increase in stock price is fair?

[MBA XAT 2017]

A Cheating results in increase in the company’s stock price.

B When fraudulent companies are exposed, their stock price increases.

C When fraudulent companies are caught, their stock price initially goes down.

D Acknowledgement of deceit increases the stock price of companies.

E Compliance with court order increases the company’s stock price.