Investors expect a company to announce a 10% increase in earnings; .........?

J

Jennifer V

New member
Investors expect a company to announce a 10% increase in earnings; instead, the company announces a 1% increase. If the market is semi-strong form efficient, which of the following would you expect to happen?

a.The stocks price will increase slightly because the company had a slight increase in earnings.
b.The stock’s price will fall because the earnings increase was less than expected.
c.The stocks price will stay the same because the earnings announcements have no effect if the market is semi-strong form efficient.

can you please explain why. I cant understand the difference between the forms of efficiency.

also what is an equilibrium continuum?

thank you
 
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