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Parker says that the present value of $350 to be received one year from today if the interest rate is 6 percent is less than the present value of $350 to be received two years from today if the interest rate is 3 percent. Ryan says that $350 saved for one year at 6 percent interest has a smaller future value than $350 saved for two years at 3 percent interest.
Suppose that interest rates unexpectedly rise and that FineLine Corporation announces that revenues from last quarter were down but not as much as the public had anticipated they would be down. According to the efficient markets hypothesis, which of the following makes the price of FineLine Corporation Stock fall?
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