Luxury jewelry retailer Tiffany & Co. posted first quarter earnings that substantially beat analysts' estimates. Operational earnings "more than doubled to 48 cents a share" while analysts expected the company to make only 37 cents a share. Tiffany's stock price moved 7.5 percent higher on the news.

The largest category of sales increase was for items priced above US$50,000, primarily engagement and celebration rings. However, overall sales were robust with U.S. stores posting a 13 percent increase over the previous year. Tiffany now expects to earnings per share to fall between US$2.55 and $2.60 for the year. A previous consensus forecast from 20 analysts expected the company to post earnings of US$2.50 per share.

Multiple Choice Questions

1. When markets react instantaneously to the release of new information it is a sign of __________ .

A.market segregation

B.illegal trading

C.market efficiency

D.none of the above