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    Signaling Principle

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    USA Today once reported that executives of Teradyne told Wall Street analysts that "business was jumping" but the next day the firm's chairman sold 24,800 shares of his stock in the form for $32 each or $793,000. The chairman's secretary said the shares belonged to his daughter. Interpret these events in the light of the Signaling Principle.

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    This solution answers questions regarding the signaling principle.