Batflix, Inc. (BFLX) reported mixed financial news for March, 31 2022 relative to analyst expectations. Earnings per share (EPS) were $3.53, a first time decline of 5.9% from the same period last year, but greater than the analyst prediction of $2.89. Revenue growth was the slowest in 3 years, but it met the analyst predictions exactly. Global paid streaming memberships was 221.6 million, missing analysts' predictions by nearly 3 million. Cash flow from operations (CFO) were 922.84 million, significantly higher than CFO for March, 31 2021 of 773.3 million, when earnings were the same ($3.53 per share).

1. If markets are NOT semi-strong efficient, and the accruals anomaly applies, predict the stock price movement at the time of the earnings release compared to last years stock returns. What should the market reaction be compared to last year if the market were efficient? (4 marks)

2. Predict how an investor exhibiting prospect theory might behave. (2 marks)