Multiple Choice
Music Doctors just announced yesterday that its first quarter sales were 35% higher than last year's first quarter. You observe that Music Doctors had an abnormal return of −2% yesterday. This suggests that
A) the market is not efficient.
B) Music Doctors stock will probably rise in value tomorrow.
C) investors expected the sales increase to be larger than what was actually announced.
D) investors expected the sales increase to be smaller than what was actually announced.
E) earnings are expected to decrease next quarter.
Correct Answer:
Verified
Correct Answer:
Verified
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