Empirical results in Nichols and Wahlen's study showed that

a$.$ unexpected changes in earnings have a strong positive association with abnormal stock returns.

b$.$ analysts' forecasts of future earnings are optimistically biased.

c$.$ an investor could earn excess returns if the investor could predict accurately the sign of the change in working capital one year ahead.

d$.$ the capital markets are inefficient with respect to earnings information because investors overreact to earnings surprises.