Brady Cosmetics just announced that earnings for the first quarter of the current year

grew at an annualized rate of 3%, well above the forecasted rate. Upon the

announcement, the stock price rose sharply. Which of the following is most likely

correct?

A) Bradys price rose because the market is inefficient (semi-strong form)

B) Interest rates in the economy must have increased

C) Bradys price rose because investors likely anticipated this news

D) Bradys price rose because the market was surprised by the announcement

E) Brady must have a beta coefficient equal to 1