A study examined the price response to earnings announcements for a large sample of firms. The authors calculated earnings surprises for the firms, ranked the magnitude of the surprise, divided firms into 10 deciles based on the size of the surprise, and calculated the abnormal returns for each decile. The abnormal return of each decile portfolio is the return adjusted for both the market return in that period and the portfolio beta. It measures the return over and above what would be expected given the market conditions in that period. The figure below plots the cumulative abnormal returns by decile. 10 Earnings Surprise Decile 10 9 8 6 8 7 6 Cumulative Average Excess Return (%) 5 -4 3 -6 -8 -10 -20 -10 0 10 20 30 40 50 60 70 80 90 Days from Earnings Announcement Discuss the implications of the findings based on the above figure for market efficiency