Academic research in financial economics has documented some stock return patterns around corporate earnings announcements. As we would expect, stocks with large positive earnings (winners) experience a positive return on the announcement day while stocks with large negative earnings surprises (losers) earn negative returns on the announcement day. More surprisingly, within the 20-day period prior to the earnings announcements, prices of winner stocks tend to go up while loser stocks experience negative returns. There is no evidence of changes in analyst expectations prior to the announcement, and there is also no evidence of other publicly known differences in the relevant factors for the valuation of winner and loser stocks. However, board members are usually informed about realized earnings before this information becomes public. Based on this information, which of the following statements is not correct? A. Based on the return evidence prior to earnings announcements, you would tend to argue that markets are at best semi strong form efficient. B. The positive returns of winners on the announcement day suggests a violation of weak form market efficiency. Because of the return differences prior to earnings announcements, you would tend to argue that the market is not strong form efficient. The return evidence prior to earnings announcements cannot be used as evidence against semi strong form efficiency. E. The market reaction on the announcement day suggests that markets incorporate new information into prices