Question:
Two statements are given below. Statement I: A company announced record quarterly profits today. Statement II: The company's share price rose significantly on the stock exchange today. Which of the following best describes the relationship between the two statements?
Two statements are given below. Statement I: A company announced record quarterly profits today. Statement II: The company's share price rose significantly on the stock exchange today. Which of the following best describes the relationship between the two statements?
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Consider which of the two events is a real underlying business result and which is a market reaction that depends on it.
Updated On: Jul 8, 2026
- Statement I is the cause and Statement II is its effect.
- Statement II is the cause and Statement I is its effect.
- Both statements are independent of each other.
- Both statements are effects of a common cause.
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The Correct Option is A
Solution and Explanation
Record profits typically boost investor confidence, which raises demand for the shares and lifts the share price. So the profit announcement (Statement I) is the cause and the rise in share price (Statement II) is its effect. The correct option is 'Statement I is the cause and Statement II is its effect.'
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