2. [Predictability, surprises, and information content] Suppose it were possible to evaluate the effects on stock prices

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2. [Predictability, surprises, and information content] Suppose it were possible to evaluate the effects on stock prices of two in- formation systems: Alpha and Gamma. Each produces two ac- counting reports. The second report of each system will be identical. Information system Alpha allows you to predict the second report more accurately than the Gamma system

a. State which of the two systems you believe to be a better in- formation system. Justify your choice.

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The Analysis And Use Of Financial Statements

ISBN: 9780471375944

3rd Edition

Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried

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