Assume that a company announces unexpectedly high earnings in a particular quarter. In an efficient market one might expect ________.

A) an abnormal price change immediately after the announcement
B) an abnormal price increase before the announcement
C) an abnormal price decrease after the announcement
D) no abnormal price change before or after the announcement

Efficient Market

A market in which asset prices fully reflect all available information, making it impossible to consistently achieve higher returns than the overall market.

Unexpectedly High Earnings

Unexpectedly high earnings refer to a company's reported profits that significantly exceed analysts' forecasts or the company's own guidance.

Abnormal Price Change

A significant variation in the price of a security or trading instrument that cannot be explained by market fundamentals and might be attributed to extenuating circumstances or events.