2.Investors expect a company to announce a 10% increase in earnings; instead, the company announces a 3%
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Question:
2.Investors expect a company to announce a 10% increase in earnings; instead, the company announces a 3% increase. If the market is semi-strong form efficient, which of the following would you expect to happen?
a. The stock's price will increase slightly because the company had a slight increase in earnings.
b. The stock's price will fall because the increase in earnings was less than expected.
c. The stock's price will stay the same because earnings announcements have no effect if the market is semi-strong form efficient.
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